Investors flee shares on widening war fear

Surging oil prices emerge as top concern for investors in India

- Ram Sahgal, Rituraj Baruah

Investors offloaded shares Monday on concerns about the economic fallout from the Israel-Hamas conflict. Oil and gas prices soared amid apprehension that the conflict may spread throughout the wider West Asian region.

The selling pressure, led by retail and foreign portfolio investors (FPIs), drove the India VIX volatility index to post the biggest rise in 10 months, indicating the nervousness in the market over the impact of the war on crude prices and the rupee.

The benchmark Nifty and Sensex fell more than 0.7% each, while the small- and mid-cap indices fell at a faster pace. The Nifty shed 141.15 points to close at 19,512.35 while the Sensex fell 483 points to 65,512.39, as FPIs sold a provisional ₹997.76 crore. Though retail figures aren’t available, the sharper 1.3-1.6% fall in the Nifty Midcap 150 and the Nifty Smallcap 250 indices suggests significant selling by retail as the provisional purchase of ₹2,661.67 crore by domestic institutional investors, including mutual funds, couldn’t stave off the market fall.

The rupee fell by 2 paise to a record low of 83.27 to the dollar, while the 10-year bond yield rose 4 basis points to 7.38%. One basis point is one-hundredth of a percentage point.