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Indian benchmark stock indices, Sensex and Nifty, experienced a nearly 1 per cent decline, influenced by soaring crude oil prices, adverse global market trends, and substantial foreign fund outflows, alongside escalating geopolitical tensions and inflation worries.
Photograph: Danish Siddiqui/Reuters
Key Points
- Indian benchmark indices Sensex and Nifty fell by nearly 1 per cent, driven by high crude oil prices, weak global cues, and foreign fund outflows.
- Brent crude surged above $120 per barrel, intensifying inflation concerns and pressuring global risk assets, particularly impacting India’s import-reliant economy.
- Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,468.42 crore, contributing to the market decline and rupee hitting record lows.
- Geopolitical tensions in West Asia and the US Fed’s firm policy stance further tightened conditions for emerging markets, including India.
- Despite early panic selling, Indian markets showed a disciplined recovery from intra-day lows, with IT and pharma sectors seeing defensive buying.
Benchmark stock indices Sensex and Nifty closed nearly 1 per cent lower on Thursday as crude oil prices, weak global trends and foreign fund outflows weighed on investor sentiment.
The 30-share BSE Sensex tumbled 582.86 points or 0.75 per cent to settle at 76,913.50.
During the day, it plunged 1,237.5 points, or 1.59 per cent, to 76,258.86, but recovered some of the losses in the second half of the session.
The 50-share NSE Nifty dived 180.10 points or 0.74 per cent to end at 23,997.55.
Market Laggards and Gainers
Among the 30-Sensex firms, Eternal, Hindustan Unilever, Tata Steel, Larsen & Toubro, UltraTech Cement and Mahindra & Mahindra were the major laggards.
Sun Pharma, Infosys, Bajaj Finance and Adani Ports were among the gainers.
Brent crude, the global oil benchmark, traded 1.52 per cent lower at $116.2 per barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,468.42 crore on Wednesday, according to exchange data.
Analyst Insights on Market Volatility
“Indian markets closed a volatile session with a clear shift in intra-day sentiment, where early panic selling was gradually absorbed, leading to a disciplined recovery from the lows. The Nifty-50 opened with a sharp gap down near the crucial 24,000 support, reflecting weak global cues and a risk-off undertone.
“Escalating geopolitical tensions in West Asia and Brent crude surging above $120 triggered concerns around inflation, currency stability, and margin pressures.
“This was further aggravated by the rupee hitting record lows, accelerating FII outflows and weakening overall sentiment,” Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.
However, the second half marked a notable turnaround, he said.
Global Market Performance and Impact
In Asian markets, South Korea’s benchmark Kospi, Japan’s Nikkei 225 index and Hong Kong’s Hang Seng index ended over 1 per cent lower, while Shanghai’s SSE Composite index settled marginally higher.
“Brent crude crossed the $120 per barrel mark for the first time in four years, intensifying inflation concerns and pressuring global risk assets. In India, rising oil prices weighed on the INR and revived worries about capital outflows and widening deficits, given the economy’s heavy reliance on crude imports.
“The Fed kept rates unchanged but maintained a firm policy stance, supporting the dollar and tightening conditions for emerging markets. Domestically, autos, banks, metals, and real estate led the decline, while IT and pharma saw selective defensive buying,” Vinod Nair, Head of Research, Geojit Investments Limited, said.
