Sensex tanks 1,124 points as Nifty falls 1.56% amid crude surge
Indian stock markets crashed on Monday as Sensex and Nifty fell over 1.5% due to rising crude oil prices, high US bond yields, and a weakening rupee.
The Indian equity markets faced a brutal session on Monday, witnessing a massive sell-off that wiped out significant value from benchmark indices. Both the Sensex and Nifty 50 tumbled by more than 1.5 per cent, driven by a perfect storm of rising global crude oil prices, climbing US bond yields, and a depreciating rupee.
The Sensex ended the day at 72,771.72, marking a sharp decline of 1,124.02 points, or 1.52 per cent. Similarly, the Nifty 50 closed at 22,780.25, shedding 360.25 points, representing a 1.56 per cent drop. The downturn was broad-based, with nearly every major sectoral index ending in the red.
Crude oil and global pressures trigger sell-off
A primary catalyst for the market bloodbath was the sudden spike in energy costs. Brent crude prices surged by more than 3 per cent, crossing the USD 107 mark. For an oil-importing nation like India, such a jump intensifies fears regarding inflation and rising import bills.
Beyond oil, several global macroeconomic factors weighed heavily on investor sentiment:
- Rising US Bond Yields: US 10-year yields hovering near 5.2 per cent have pressured emerging market flows.
- Weakening Rupee: The Indian rupee's movement towards the Rs 96 per dollar mark has heightened concerns over currency stability.
- Geopolitical Tensions: Uncertainty in the Middle East, particularly regarding the Strait of Hormuz and tensions involving Iran and Saudi Arabia, has disrupted oil supply expectations.
Sectoral performance: PSU banks and Realty hit hard
The selling pressure was felt across the board, but certain sectors bore the brunt of the volatility. The Nifty PSU Bank index was one of the worst performers, plunging more than 3.20 per cent. Other notable decliners included:
- Nifty Realty: Down 2.32 per cent
- Nifty Metal: Down 1.90 per cent
- Nifty Oil and Gas: Down 1.97 per cent
- Nifty Auto: Down 1.74 per cent
- Nifty FMCG: Down 1.38 per cent
While most stocks struggled, a few outliers managed to stay afloat, with Dr Reddy's and Infosys being among the rare gainers in the Nifty 50 pack. Conversely, heavyweights like Jio Finance, Adani Enterprises, and Tata Consumer were among the top losers.
Commodity markets witness decline
The bearish sentiment was not limited to equities. Precious metals also saw a significant retreat. Gold prices dropped by more than 2.5 per cent, trading at Rs 1,47,100 per 10 grams for 24 karat. Silver followed a similar trajectory, falling 3.25 per cent to reach Rs 2,26,988 per kg.
Expert outlook: Volatility to persist?
Market experts suggest that the current volatility is a reflection of global macro pressures rather than domestic fundamentals. Analysts have noted that if Brent crude continues to test resistance levels near USD 108-109, it could potentially climb towards USD 112 or USD 115, further complicating the outlook for Indian markets.
Investors are advised to remain cautious and selective, focusing on companies with strong balance sheets and clear earnings visibility as the market navigates these global headwinds.