Benchmark equity indices ended sharply lower on Tuesday as rising crude oil prices, a record-low rupee and escalating geopolitical tensions triggered broad-based selling across sectors, wiping out nearly Rs 9.6 lakh crore in investor wealth.
The BSE crashed 1,456.32 points or 1.92% to close at 74,558.96, while the NSE Nifty50 slumped 454.15 points or 1.91% to settle at 23,361.70.
The sharp selloff erased approximately Rs 10 lakh crore in investor wealth during the session.
Investor sentiment remained fragile after the rupee plunged to a fresh all-time low of 95.58 against the US dollar earlier in the day, intensifying concerns around inflation, India’s import bill and foreign fund outflows.
Markets also remained under pressure due to fears surrounding the fragile US-Iran ceasefire and a sharp surge in crude oil prices. Brent crude prices have climbed significantly in recent sessions, raising concerns over higher fuel costs and pressure on India’s current account deficit.
India imports more than 85% of its crude oil requirements, making domestic markets highly sensitive to global energy price shocks.
IT stocks among worst hit
Information technology stocks emerged among the biggest drags on the market amid fears surrounding slowing global growth and weaker technology spending by overseas clients.
TCS fell 3.92%, Infosys declined 3.23%, while HCLTech dropped 4.21%. Tech Mahindra slipped 4.54% and Wipro fell 3.79%, dragging the Nifty IT index sharply lower.
Banking and financial stocks also witnessed heavy selling pressure. HDFC Bank declined 1.96%, ICICI Bank fell 2.11% and Bajaj Finance dropped 3.47%. Shriram Finance plunged over 5%, while HDFC Life and SBI Life also ended deep in the red.
Consumption-linked stocks remained under pressure following concerns around reduced discretionary spending and rising fuel costs. Titan tumbled 3.69%, Trent fell 3.21% and InterGlobe Aviation (IndiGo) declined 2.35%.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, said the prime minister’s recent austerity appeal had impacted sentiment in sectors linked to discretionary consumption.
“The austerity call by the prime minister impacted the stock prices of sectors which are expected to be negatively affected by reduced consumption. Stocks of sectors like jewellery, travel and hotels bore the brunt of selling yesterday,” he said.
He added that market direction would continue to depend heavily on crude oil prices and developments in West Asia.
“It is important to understand that these sectors will bounce back smartly if crude falls sharply and the austerity package becomes irrelevant. Therefore, watch out for the West Asia geopolitical situation and crude prices,” Vijayakumar said.
Vinod Nair, Head of Research at Geojit Investments Limited, said domestic equities remained under pressure due to a combination of rising crude oil prices, rupee weakness and foreign investor outflows.
“Domestic equities remained under pressure, with the rupee weakening to record lows amid rising crude oil prices linked to escalating tensions in West Asia along with FII outflows. The decline was broad-based, led by IT and realty stocks,” he said.
Nair added that IT stocks were also impacted by concerns around AI-led disruption and pricing pressure.
“IT stocks underperformed as concerns grew around AI-driven pricing pressure and potential disruption following recent enterprise adoption initiatives by OpenAI,” he said.
He said investors are now closely tracking upcoming domestic inflation data to assess the broader economic impact of the ongoing geopolitical crisis.
“Investors are also awaiting the upcoming domestic CPI data to assess the spillover impact of the ongoing US-Iran conflict. Near-term market sentiment is likely to stay volatile due to crude and currency concerns, though any signs of geopolitical easing could support relief rallies, aided by resilient domestic fundamentals and stable institutional flows,” Nair added.
Despite the broader weakness, some oil-linked and metal stocks managed to outperform. ONGC surged 4.75% as higher crude prices improved sentiment around upstream energy companies. Hindalco gained 1.73%, while Tata Steel and NTPC showed relative resilience.
Analysts said markets are currently witnessing a sharp risk-off phase, with investors reducing exposure to equities amid rising geopolitical uncertainty, sanctions-related concerns and fears of prolonged pressure from elevated oil prices.
Market participants are now closely tracking crude oil movements, foreign institutional investor activity, developments around Russian energy sanctions and possible intervention by the Reserve Bank of India to stabilise the rupee.