‘High crude prices spook foreign players’: Nifty, Sensex hit 3-month low amid IPO boom

The Indian stock market suffered a near 3-month low on Tuesday due to increased geopolitical turmoil in the Middle East, soaring crude oil prices, and a surge in Initial Public Offerings (IPOs). The National Stock Exchange's (NSE) Nifty 50 index closed at 23,635.10, down 144.05 points or 0.6%, while the BSE's Sensex fell 0.7% to 75,577.58.

Following a 4.2% rally over the past week, the indices have since declined 4.6%. G Chokkalingam, founder of Equinomics Research, attributed the market's slump primarily to liquidity issues, citing the rise in crude prices that has deterred foreign investors and the ongoing IPO boom that has redirected capital to the primary market.

Global crude prices surged to just below $100 per barrel as tensions escalated between the US and Iran. This has added to the pressure on the Indian rupee, which weakened on Tuesday, further exacerbating the cost of crude imports. Despite the overall market decline, the mid- and small-cap sectors experienced gains, with various sectors performing differently.

The IPO market has seen a surge, with around 34 companies aiming to raise Rs 45,000 crore, and 12 issues expected to start trading this week. While some analysts believe the liquidity strain caused by the IPO boom is temporary, others warn that the recent correction may persist for several more weeks if crude prices remain high and the IPO momentum continues.