Key Points:
- Sensex and Nifty fell nearly 2% as crude oil surged and foreign investor selling rattled markets.
- Heavy losses in banking and blue-chip stocks like Bajaj Finance, Axis Bank, and Kotak Mahindra Bank dragged indices lower.
- Global markets showed mixed trends, with Asian indices rising while European markets slipped amid geopolitical uncertainty.
India’s benchmark stock indices Sensex and Nifty fell nearly 2 percent on Wednesday as crude oil prices surged amid rising tensions in West Asia, while foreign investor outflows and selling in bank stocks added pressure on markets.
Oil Price Spike Triggers Market Sell-Off
The 30-share BSE Sensex dropped 1,342.27 points, or 1.72 percent, to close at 76,863.71. During the session, the index slid as much as 1,446.72 points to an intraday low of 76,759.26.
The NSE Nifty 50 also declined sharply, losing 394.75 points, or 1.63 percent, to end at 23,866.85.
The decline followed a sharp rise in crude oil prices linked to escalating geopolitical tensions in West Asia, which raised concerns about inflation and economic stability.
Brent crude, the global oil benchmark, surged 5.76 percent to $92.86 per barrel.
Market analysts said higher oil prices typically weigh on India’s economy because the country imports the majority of its crude oil needs.
“Rising crude prices tend to increase inflationary pressures and widen the current account deficit, which makes investors cautious,” said a Mumbai-based market strategist.
Banking And Blue-Chip Stocks Drag Indices Lower
Selling in heavyweight banking and financial stocks further pulled the indices lower.
Among the biggest losers on the Sensex were Bajaj Finance, Axis Bank, Bajaj Finserv, Kotak Mahindra Bank, and Bharti Airtel. Shares of Mahindra & Mahindra, Maruti, and Trent also declined during the session.
Only a few stocks managed to gain. Sun Pharma and NTPC ended higher, providing limited support to the broader market.
Foreign institutional investors continued to pull money out of Indian equities. Exchange data showed that FIIs sold shares worth ₹4,672.64 crore on Tuesday.
Domestic institutional investors helped cushion the fall by purchasing stocks worth ₹6,333.26 crore during the same period.
“Persistent foreign fund outflows are creating volatility in the market, particularly in large-cap banking stocks,” another market analyst said.
Global Market Trends Mixed
Global markets presented a mixed picture.
In Asia, Japan’s Nikkei 225 rose 1.43 percent, and South Korea’s Kospi gained 1.40 percent. China’s Shanghai Composite index also ended in positive territory.
Hong Kong’s Hang Seng index, however, finished lower.
European markets were trading in negative territory during the day, reflecting investor caution amid geopolitical uncertainty and rising energy prices.
The U.S. stock market ended mostly flat on Tuesday, and Sensex and Nifty fell, offering limited cues for global investors.
Indian markets had closed higher in the previous session. On Tuesday, the Sensex rose 639.82 points, or 0.82 percent, to settle at 78,205.98, while the Nifty gained 233.55 points, or 0.97 percent, to close at 24,261.60.
Market participants said investors will continue to monitor crude oil movements, geopolitical developments in West Asia, and foreign investment flows for direction in the coming sessions.
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