Mumbai, Feb 18 (IANS) Rising global crude oil prices, along with heightened tensions between India and Pakistan, dragged the Indian equity market on Monday, with the key equity indices closing lower for the 8th consecutive session despite optimism following the US-China trade talks.
The rising Brent crude prices weakened the Indian currency by 12 paise on Monday. Rupee closed at Rs 71.34 per dollar from its previous close of 71.22.
Besides, the equity market also reacted negatively to the outflow of foreign funds seen in the last few trading sessions.
The S&P BSE Sensex closed 310.51 points or 0.87 per cent lower at 35,498.44 from its previous close of 35,808.95, while the Nifty ended 83.45 points lower at 10,640.95.
“Domestic markets are seeing a decoupling from global markets that further indicates the fact that we are moving towards a macroeconomic event such as the general elections, one of the reasons why this decoupling is seen in the last 2-3 months,” said Mustafa Nadeem, CEO, Epic Research.
“Crude oil prices (WTI) may further have an impact on the Indian equity market since it has been on the rise and taking well support over $50-mark for the last couple of weeks.”
Lately, investors have also grown cautious due to the Indo-Pak tensions following the Pulwama terrorist attack. Indian withdrew the Most Favoured Nation (MFN) status accorded to Pakistan and imposed 200 per cent customs duty on imports from there.
Analysts said that worsening relation0s between India and Pakistan have a bearing on the captital inflow. This was one of the reasons for the acceleration of outflows of foreign funds.
“Market remained on a selling spree as reducing foreign inflows due to fear of escalation of tensions at the border impacted the sentiment,” said Vinod Nair, Head of Research, Geojit Financial Services.
“Volatility in the market may continue due to lack of domestic triggers as investors are likely to remain cautious.”
Top gainers on the BSE were ONGC, up 1.70 per cent at 137.40, followed by Tata Motors, Axis Bank, Vedanta and NTPC, which gained up to 1.15 per cent.
Among the top laggards were TCS, down over 3 pet cent, followed by Yes Bank, ITC, Sun Pharma, Reliance Industries and Coal India.
On Friday, foreign institutional investors (FIIs) sold shares to the tune of Rs 966.43 crore, while the domestic institutional investors (DIIs) bought Rs 853.25 crore worth of scrips.