Sensex, Nifty Slip as Iran War Fears Lift Crude, Fed Hawkishness Weighs
Indian markets fell on Aug 31 as Iran war escalation lifted crude prices and Fed Chair Warsh's hawkish comments weighed on sentiment.
Indian financial markets opened lower on Monday, with the benchmark indices declining as escalating tensions in the Iran war pushed crude oil prices higher. The BSE Sensex was trading down 0.5% at 76,900, while the broader NSE Nifty 50 slipped 0.6% to 24,035.
Investor sentiment was also dampened by hawkish commentary from Federal Reserve Chair Kevin Warsh, which raised concerns about a potential rate hike. The Indian rupee weakened 0.1% against the U.S. dollar to 95.45, pressured by rising bets of a Fed rate increase and the jump in oil prices.
In the government bond market, the benchmark 10-year bond was quoted at 99.91 rupees, with the yield rising four basis points to 6.95%. Elevated oil prices and expectations of a Fed rate hike in September hurt sentiment.
The overnight index swap market also reflected the cautious mood, with the one-year swap rate up 8 basis points at 6.02% and the five-year swap rate jumping 8 basis points to 6.52%.
In the money market, the overnight call money rate had not yet traded, while the overnight TREPS rate was at 5.05%.