Surging crude, persistent foreign selling and fears of tighter monetary policy sent the Sensex down 1.44 per cent and pushed the Nifty to its lowest level in 52 weeks.
Indian shares slumped on Thursday as surging crude prices, persistent foreign selling and fears of tighter monetary conditions combined to trigger a broad risk-off move across the market. The sell-off wiped out about Rs 10 lakh crore of investor wealth in a single session, according to PTI, as benchmark indices dropped to levels not seen in more than two and a half years.
The BSE Sensex closed at 71,593.24, down 1,045.46 points, or 1.44 per cent, after falling as much as 1,310.95 points during the day. The NSE Nifty50 ended at 22,231.80, down 371.25 points, or 1.64 per cent, and briefly touched an intraday low of 22,179.90, a fresh 52-week trough. The decline left the Sensex down more than 16 per cent so far this year, while the Nifty has fallen almost 15 per cent, highlighting the depth of the correction.
The immediate catalyst was a sharp jump in oil prices. Brent crude rose more than 4 per cent and moved above $104 a barrel intraday as tensions in the Middle East revived fears of imported inflation and a renewed squeeze on corporate margins. Market participants also pointed to a backdrop of higher US Treasury yields, a weaker rupee and expectations that central banks may keep policy restrictive for longer than investors had hoped.
Analysts said those pressures have been compounded by sustained foreign institutional investor selling. Exchange data showed overseas investors sold equities worth Rs 6,121.37 crore on Wednesday, adding to the strain on domestic sentiment. Hariselvan Radhakrishnan, founder and chief executive of HST Wealth, told PTI that tighter domestic monetary policy expectations, renewed oil-price pressure and persistent foreign outflows were together eroding appetite for risk. Vinod Nair, head of research at Geojit Investments, said hawkish Reserve Bank of India expectations, harder bond yields and a weaker rupee were resetting near-term valuations.
The weakness was broad-based, with metal, realty, energy and power among the hardest-hit sectors. All BSE sectoral indices finished lower. Mid-cap and small-cap shares suffered even steeper losses, underlining the cautious mood. On the Sensex, ITC, InterGlobe Aviation, Power Grid, Bharat Electronics, Adani Ports and NTPC were among the major losers, while Tech Mahindra, Axis Bank and Infosys managed gains. Ajit Mishra, senior vice-president for research at Religare Broking, told PTI that the market had entered a clear risk-off phase, with breadth deteriorating sharply as selling spread across most areas of the market.
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