The stock market today closed down on a low note Monday, August 31, as crude oil prices rose, geopolitical tensions were renewed, and global interest rates were a concern. The Sensex fell 307.24 points, or 0.40%, to close at 76,957.27, while the Nifty 50 declined 95.25 points, or 0.39%, to settle at 24,080.40.
Key Highlights
- Crude prices and geopolitical tensions battered investor sentiment on the stock market today as key indices closed lower.
- Sensex lost 307 points and Nifty dropped by 95 points to close on a high volatility note in the absence of clear market signals in August.
Crude Oil and Global Cues Weigh on Markets
Investors' mood remained gloomy due to the fears of a rise in crude prices and the escalation of tensions between Israel and its Arab neighbors in West Asia, which fueled inflationary worries and put pressure on corporate expenses. Brent crude ticked just shy of $90 a barrel as the oil price continued to push equity markets higher.Oil price also pushed equity markets higher as Brent crude traded near $90 a barrel.
The same lack of confidence in the global market continued after doubts about the US monetary policy. There was increased uncertainty for emerging-market stocks after the Federal Reserve's hawkish comments by Chair Kevin Warsh over a potential interest-rate increase.
It was a losing day for eight of the 16 major sectors and small-cap stocks were pressured as well during Monday's session. The Nifty MidCap index, however, trended slightly higher, rising by around 0.24% to reflect relatively better performance in parts of the broader market.
Also Read: Stock Market Weekly Report: Sensex and Nifty End Week Lower
MSCI Rebalancing Drives Late-Session Volatility
The stock market today also witnessed heightened stock-specific volatility due to the latest MSCI index rebalancing. India's newly introduced Closing Auction Session saw unusually heavy activity, with around $4.1 billion worth of trades executed during the closing auction window, according to reports.
Reliance Industries fell after its weightage in the index was reduced, while some other stocks like Laurus Labs and Adani Energy Solutions had significant movements due to index changes. Another highlight was that the HDFC Bank's CEO does not wish to seek a third term in office.
On the other hand, the Indian rupee rose to 95.1625 against the US dollar, as equity-related inflows were propped up by the MSCI reshuffle.
