MUMBAI: Rising oil prices weighed on investor sentiment on Dalal Street for the third consecutive session, pulling the Sensex down by 1,000 points (1.3%) on Friday to close at 76,664 points.
Foreign Funds and Rupee Weakness
Foreign funds continued to sell aggressively, leading to a 2,609-point fall in the Sensex over the last three sessions. The weakness of the rupee, which fell against the dollar for the fifth consecutive session, also dampened investor sentiment, market players said. The sell-off left investors poorer by nearly Rs 5 lakh crore, with BSE's market capitalisation now at Rs 461.5 lakh crore, official data showed.
IT Stocks Worst Hit
IT stocks were the worst hit, with the BSE IT index closing 5.1% lower. The strong selling in this sector was driven by weak business forecasts from two sector leaders, Infosys and HCL Tech, following their quarterly results this week, analysts said.
Rising crude oil prices have added to inflationary pressures, raising concerns about potential interest rate hikes and impacting corporate profitability. The persistent selling by foreign institutional investors (FIIs) has further exacerbated the downturn, as they offloaded shares worth billions over the past few sessions. The rupee's depreciation against the dollar has also made imports costlier, affecting companies with high import dependence.
Market experts advise caution in the near term, as geopolitical tensions and global economic uncertainties continue to influence investor behavior. However, some see the current correction as a buying opportunity for long-term investors, especially in fundamentally strong stocks.
