Sensex down 600 pts, Nifty near 23,450: Surging crude prices among key factors behind market decline

New business data points to the fact that The domestic markets traded softer on Wednesday as a fresh ​escalation in the West Asia conflict had ‌Brent crude hurtling toward $100 per barrel, a pain point for the world's third-largest oil ​importer.

At 10 a.m., the Sensex was down 598.48 points or 0.8 percent at 74,979.09, while the broader Nifty declined to 23,474.95, down 160.15 points or 0.7 percent.

Key factors behind market slide

1) Climb in crude prices: Brent crude ​futures ⁠jumped 1.5% to $99.5 per barrel. Elevated crude prices threaten to widen the trade deficit, ⁠fuel ​inflation, and weigh on ​expansion in India.

2) Geopolitical concerns: The ⁠West Asia war intensified with Iranian-backed Houthis in Yemen rolling out strikes on several Saudi cities, further embroiling a U.S. ​ally in the ​conflict, ⁠while U.S. forces hit multiple Iranian oil tankers and Iran struck ​a U.S. base in Jordan.

3) FII selling: The foreign institutional market participants (FIIs) turned net sellers on September 8, offloading Indian equities worth Rs 123 crore.

Anand James, Chief Market Strategist at Geojit Investments, stated "Being in the vicinity of July’s low raises hopes of bulls regrouping, but yesterday’s close below the softer bollinger band does suggest that slippages are not over. This brings 23500-260-23000 into focus. Alternatively, consolidation near 23500 or early ability to float above 23650 could set up conditions for short covering aiming 23860-900."