Indian equity markets witnessed a sharp sell-off on Monday, with benchmark indices Sensex and Nifty plunging more than 3 per cent intraday as surging crude oil prices and weak global cues triggered widespread risk aversion among investors.
While both benchmarks eased from the sharp decline seen during the session, they still settled the day in red with significant losses.
The BSE Sensex closed the session above 77,550, clocking a dramatic loss of more than 1,300 points, while the NSE Nifty50 rang the closing bell near 24k, tanking over 400 points.
The steep fall came amid escalating tensions in West Asia, which pushed oil prices sharply higher and rattled global financial markets. Persistent selling by foreign institutional investors further dampened sentiment.
Broad-Based Sell-Off Across Blue-Chip Stocks
Selling pressure was widespread across the market, with all 30 constituents of the Sensex trading in the red during the session.
Among the biggest laggards were State Bank of India, Mahindra & Mahindra, UltraTech Cement, Maruti Suzuki, InterGlobe Aviation and Adani Ports, as investors cut exposure to riskier assets amid rising geopolitical uncertainty. The only gainers on the index included Reliance, Infosys, HCL Tech, Sun Pharma, and Tech M.
In the broader markets, the Nifty Bank plunged more than 3 per cent. Sectorally, the Auto and PSU Bank indices dominated in red and bled 4.10 per cent and 3.97 per cent respectively. On the other hand, the IT index remained the only exception in green and inched up 0.08 per cent.
The sharp decline reflected a combination of global headwinds and domestic concerns, with investors reacting strongly to the spike in crude oil prices and continued foreign fund outflows.
Crude Oil Surge Triggers Market Jitters
A major factor weighing on equities was the sharp jump in global oil prices. Brent crude, the global oil benchmark, surged 17.06 per cent to $108.5 per barrel during the session.
Analysts warned that the sudden spike in energy prices could have significant implications for oil-importing economies such as India.
“Brent crude has spiked above $115 delivering a big oil shock to economies and markets. Big oil importers like India will be hit hard if the West Asian conflict lingers long and crude price remains high,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
Higher crude prices typically raise inflation risks, widen the current account deficit and put pressure on the rupee, all of which can weigh on investor sentiment and equity valuations.
Global Markets Under Pressure
The weakness in Indian equities mirrored a broader decline across global markets as investors reacted to the worsening geopolitical situation.
In Asian markets, South Korea’s Kospi plunged more than 6 per cent, while Japan’s Nikkei 225 dropped nearly 5 per cent. China’s Shanghai SSE Composite index and Hong Kong’s Hang Seng index also ended lower.
Wall Street had closed in negative territory in the previous session on Friday, adding to the cautious mood in global markets.
Persistent FII Selling Adds To Pressure
Foreign investor activity continued to remain a key overhang for domestic markets. According to exchange data, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 6,030.38 crore on Friday.
Domestic Institutional Investors (DIIs), however, provided some support by purchasing shares worth Rs 6,971.51 crore in the previous session.
Despite the DII buying, the scale of global uncertainty and rising commodity prices kept investors on edge.
Recent Market Performance
The sharp fall on Monday came after markets had already ended the previous session with notable losses. On Friday, the Sensex had dropped 1,097 points, or 1.37 per cent, to settle at 78,918.90, while the Nifty declined 315.45 points, or 1.27 per cent, to close at 24,450.45.
For the previous week as a whole, the BSE benchmark had plunged 2,368.29 points, or 2.91 per cent, while the Nifty lost 728.2 points, or 2.89 per cent.
Market participants said the combination of geopolitical tensions, elevated oil prices and sustained foreign outflows has significantly increased volatility, and investors are likely to remain cautious in the near term as they monitor developments in global energy markets and West Asia.
