SENSEX falls over 500 points, NIFTY50 tests 24,100, rupee drops as crude spikes; here is why

The Indian equity benchmarks staged a gap down opening on Tuesday, July 14, as sentiment took a knock after crude oil prices spiked above $85 per barrel as tensions between United States (US) and Iran escalated.

The SENSEX fell as much as 552 points and NIFTY50 index touched an intraday low of 24,050 dragged down by losses in HDFC Bank, ICICI Bank, Larsen & Toubro, Bajaj Finance, Mahindra & Mahindra and State Bank of India.

As of 9:23 am, the SENSEX was down 290 points at 77,326 and NIFTY50 index dropped 74 points to 24,138.

Brent crude futures surged as much as 2.8% to hit an intraday high of $85.66 per barrel after US Central Command (CENTCOM) said that its forces will resume blockading maritime traffic entering and exiting Iranian ports on July 14.

CENTCOM forces will enforce the blockade against vessels transiting to or from Iranian ports and coastal areas. The US military continues to support traffic flow through regional waters for all vessels not violating the blockade.

The resumption of the US blockade against Iran follows the initial implementation from April 13 to June 18. CENTCOM forces redirected more than 140 compliant vessels, disabled nine non-compliant ships, and allowed over 50 commercial vessels supporting humanitarian aid to pass through the blockade during the two-month period.

Back home, rupee weakened below 96 per dollar tracking a spike in crude prices. The local unit fell as much as 42 paise to 96.10 against US dollar.

Eight of 15 major sector gauges compiled by the National Stock Exchange (NSE) were trading higher led by the NIFTY Realty index's 1.2% fall. NIFTY Bank, Financial Services, Private Bank, PSU Bank, Oil & Gas, Consumer Durables and Auto indices also fell between 0.4% and 0.8%.

On the other hand, metal, pharma, FMCG, IT and healthcare shares were witnessing buying interest.

Broader markets were facing selling pressure as NIFTY Midcap 100 index dropped 0.3% and NIFTY Smallcap 100 index declined 0.4%.

Among the individual shares, Nuvoco Vistas Corporation surged as much as 13% to hit an intraday high of ₹358.80 after the company said that its cement capacity in the first quarter of current financial year rose from 27 million metric tonnes per annum (MMTPA) to 35 MMTPA.

Container Corporation of India shares advanced as much as 6% to touch an intraday high of ₹492 after the company said that its total volumes handled at during the first quarter rose by 8.89% to 14.04 lakh TEUs.

Shriram Finance was top loser in the NIFTY50 index, the stock fell 3.7% to ₹1,008. IndiGo, Bajaj Finance, Mahindra & Mahindra, HCL Technologies, Bajaj Auto, Ultratech Cement, Tata Motors PV and Grasim were also among top losers in the NIFTY50 index.

On the flip side, Cipla was top gainer in the NIFTY50 index, the stock rose 1.84% to ₹1,453. Hindalco, Bharti Airtel, Nestle India, Dr Reddy's Labs, Tata Steel, TCS, Sun Pharma, Tata Consumer Products and TCS also rose between 0.6% and 1.6%.

The overall market breadth was negative as 1,888 shares were declining while 940 were advancing on the NSE.