Dalal Street saw an early rout as stock markets witnessed heavy selling pressure on Monday morning, with the , as rising crude oil prices, a record low rupee and weak global cues rattled investor sentiment.
The benchmark BSE plunged 939.10 points, or 1.25%, to 74,298.89 at 9:37 am, while the NSE Nifty50 fell 284 points, or 1.20%, to 23,359.50.
The sharp decline came after tensions in West Asia escalated further, raising fears of wider disruption to global oil supplies.
Investor sentiment weakened further after US President Donald Trump warned that “the clock is ticking” for , indicating that efforts to end the conflict have stalled.
One of the biggest reasons behind the market fall was the sharp rise in prices.
Brent crude climbed 1.72% to USD 111.14 per barrel, while WTI crude rose 2.02% to USD 107.55 per barrel.
Oil prices surged after concerns increased over supply disruptions in the , one of the world’s most important oil shipping routes.
For India, rising crude oil prices are a major concern because the country imports nearly 85% of its oil requirements.
Higher crude prices increase inflation risks, pressure corporate earnings and raise concerns around India’s current account deficit.
The rise in crude prices also comes just days after petrol and diesel prices in India were increased by Rs 3 per litre for the first time in nearly four years.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said elevated crude oil prices could lead to another round of fuel price hikes.
“Brent crude has spiked to $111 on absence of initiatives to open the Strait of Hormuz. Elevated crude may force another round of price hikes in petrol and diesel, which will have negative implications for inflation,” he said.
The rupee also remained under heavy pressure and continued trading near record low levels against the US dollar.
Rupee hit a fresh record low on Monday, falling nearly 0.3% to 96.2275 against the US dollar as rising oil prices due to the Iran war increased pressure on India’s economy. The rupee has now weakened for five straight sessions and has fallen 5.5% since the conflict began, although traders said RBI intervention helped limit sharper losses.
The weakening rupee has become another key concern for investors because a softer currency makes crude oil imports more expensive and increases imported inflation risks.
The rupee has already slipped past the 96-per-dollar mark in recent sessions amid rising oil prices and foreign investor outflows.
Dr. Vijayakumar warned that further rupee weakness could worsen foreign investor selling in Indian equities.
“Rupee may further depreciate aggravating the vicious cycle of rupee depreciation and FPI selling. Some measures to strengthen the rupee are due and likely soon,” he said.
The spike in US 10-year bond yields to 4.62% also added pressure on emerging markets like India by making US assets more attractive to foreign investors.
Weak global cues also dragged Indian equities lower.
Asian markets fell around 0.8% as investors moved away from riskier assets amid fears of further escalation in West Asia.
The broader weakness across global markets added to selling pressure on Dalal Street.
Foreign portfolio investors have already sold billions of dollars worth of Indian equities this year amid concerns over oil prices, currency weakness and global uncertainty.
The selloff was broad-based, with all major sectoral indices trading in the red except IT.
Nifty PSU Bank fell 2.08%, Nifty Realty declined 2.29%, while Nifty Consumer Durables dropped 2.51%.
Metal stocks also remained under pressure, with Nifty Metal slipping 1.75%.
Broader markets witnessed even sharper losses. The Nifty Midcap100 index fell 1.28%, while the Nifty Smallcap100 declined 1.77%.
Among Sensex stocks, Tata Steel was the worst performer, falling over 4%, while Power Grid slipped 3.87%. Adani Ports, Maruti Suzuki and Titan also fell sharply.
IT stocks showed some resilience amid expectations that export-oriented sectors may benefit from rupee weakness. Infosys gained 0.80%, while Tech Mahindra rose 0.09%.
Dr. Vijayakumar said sectors linked to exports could remain relatively resilient despite broader market weakness.
“In the present context, export-oriented sectors like pharmaceuticals will continue to be resilient. Leading private sector banks, under pressure from FPI selling, are fundamentally strong and attractively valued. Long-term investors can accumulate these stocks on weakness,” he said.
Analysts believe that if crude oil prices remain above USD 100–110 per barrel for a prolonged period, pressure on inflation, fuel prices and the Indian economy could increase further.
(Disclaimer: The views, opinions, recommendations, and suggestions expressed by experts/brokerages in this article are their own and do not reflect the views of the India Today Group. It is advisable to consult a qualified broker or financial advisor before making any actual investment or trading choices.)