Stock markets tumble in early trade; Sensex tanks 700 points

Mumbai: Equity benchmark indices Sensex and Nifty tumbled in early trade on Wednesday amid uncertainty related to US–Iran negotiations, fresh spike in crude oil prices and persistent foreign fund outflows.

The 30-share BSE Sensex tanked 699.74 points to 73,959.48 in early trade. The 50-share NSE Nifty dropped 177.40 points to 23,302.50.

From the 30-Sensex firms, Tata Consultancy Services, Tech Mahindra, Infosys, HCL Tech, ITC and Eternal were among the biggest laggards.

IT stocks fell sharply amid profit-taking after rallying in the past few days.

Meanwhile, Maruti, Adani Ports, Asian Paints and Bharti Airtel were the gainers from the blue-chip pack.

Brent crude, the global oil benchmark, traded 0.89 per cent higher at USD 96.85 per barrel.

"The mild escalation in the West Asia conflict has again pushed up Brent crude price to close to USD 97 indicating no respite to India from the energy shock," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.

Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,362.92 crore on Tuesday, according to exchange data.

"At present, investor sentiment remains cautious and highly sensitive to incoming developments. The lack of tangible progress in US–Iran negotiations, elevated crude oil prices and continued foreign fund outflows continue to reinforce a risk-off environment," Ponmudi R, CEO of Enrich Money, an online trading and wealth-tech firm, said.

Meanwhile, the US Trade Representative has proposed slapping 12.5 per cent additional duties on 54 countries, including India, for failing to prohibit the import of goods produced with forced labour.

The action follows investigations launched against 60 countries over what the USTR described as their failure to impose and effectively enforce bans on imports made with forced labour.

"The failure of our most important trading partners to address the importation of goods made with forced labour is unacceptable. This creates a dynamic where American workers are forced to compete globally on an unlevel playing field,” US Trade Representative Ambassador Jamieson Greer said in a statement.

In Asian markets, Japan's Nikkei 225 index and Shanghai's SSE Composite index quoted higher, while Hong Kong's Hang Seng index traded lower.

US markets ended in positive territory on Tuesday.

"Overnight, the S&P 500 closed at a fresh record high, while Japan's Nikkei scaled new lifetime highs, reflecting continued confidence in global growth and technology-led earnings momentum," Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.

Vijayakumar said that the bull run in semiconductor giants South Korea and Taiwan continues unabated.

"The giant companies like Samsung, SK Hynix and TSMC, who have huge pricing power, are expected to post hugely impressive profit numbers this year and perhaps next year. It is a fact that the bull run in these markets and in US and Japan are driven by expectations of high earnings growth," he added.

On Tuesday, the Sensex climbed 382.50 points, or 0.52 per cent, to settle at 74,649.84. The Nifty rose by 100.95 points, or 0.43 per cent, to end at 23,483.55.