Mumbai: Indian equity benchmarks ended sharply lower on Monday as rising crude oil prices, escalating tensions in West Asia, surging global bond yields and persistent foreign fund outflows weighed heavily on investor sentiment.
The Sensex plunged 1,124.02 points, or 1.52 per cent, to close at 72,771.72, while the Nifty declined 360.25 points, or 1.56 per cent, to settle at 22,780.25. Selling pressure was broad-based, with losses extending across large-cap, mid-cap and small-cap stocks.
Among the Nifty constituents, Tata Motors Passenger Vehicles (TMPV), Power Grid and Jio Financial Services emerged as the top laggards.
The broader market also witnessed significant weakness, with the Nifty MidCap 100 falling 1.63 per cent and the Nifty SmallCap 100 ending 1.85 per cent lower.
Investor sentiment remained fragile amid concerns that the ongoing conflict in West Asia could further disrupt global energy supplies and fuel inflationary pressures.
Market participants reacted nervously after US President Donald Trump rejected an Iranian proposal aimed at reopening the Strait of Hormuz and easing hostilities, while Iran maintained that diplomacy remains the only solution to its conflict with the United States and Israel.
The geopolitical uncertainty reverberated across global financial markets, triggering risk-off sentiment. Major Asian markets ended lower, with South Korea declining nearly 2 per cent, Japan’s Nikkei slipping 0.10 per cent and Chinese equities dropping more than 1 per cent.
The rise in crude oil prices added to investor concerns. Brent crude futures gained 2.2 per cent to $106.6 per barrel, while US West Texas Intermediate (WTI) crude climbed 1.45 per cent to $93.76 per barrel.
Higher energy prices are seen as a key risk for India, which is heavily dependent on crude imports and remains vulnerable to inflationary pressures stemming from elevated oil costs.
Adding to the negative sentiment, global bond yields moved higher as investors reassessed inflation risks. The selloff in bond markets intensified, with yields on rate-sensitive US two-year Treasury notes rising five basis points to 4.90 per cent, while the benchmark 10-year Treasury yield advanced four basis points to 5.20 per cent. Higher yields in developed markets tend to reduce the attractiveness of riskier emerging-market assets, including Indian equities.
Foreign portfolio investors (FPIs) also continued to remain a source of pressure on domestic markets. After being net buyers during July and August, overseas investors have turned net sellers in September.
According to NSDL data, FPIs have offloaded Indian equities worth Rs 17,131 crore so far this month, taking their total net selling for the year to Rs 2.41 trillion.
Meanwhile, Rupee traded weak by 0.19 per cent at 96.00, as dollar strength and higher crude prices continued to weigh on the currency.
(IANS)
