The selloff in the Indian stock market further intensified in Tuesday’s trade on May 12, as investors feared that a prolonged oil shock could hurt the economy, while fragile negotiations to end the Iran war continued to weigh on sentiment.
Renewed selling in technology stocks and the Indian rupee sliding to a fresh low also added to the pressure, dragging the benchmark indices to their worst intraday decline in in over a month and breaching key psychological levels.
Remaining under bearish grip for the fourth straight session, the Nifty 50 plunged another 1.83%, breaking below the 24,000 mark to settle at 23,379, marking its steepest intraday. The S&P BSE Sensex also tumbled 2% to end at 74,559.
The broader markets faced even heavier selling pressure, with the Nifty Smallcap 100 index crashing 3.12%, while the Nifty Midcap 100 closed the session with a sharp 2.51% decline. All major sectoral indices ended deep in the red, led by Nifty Realty, which fell 4%, followed by Nifty IT and Nifty Consumer Durables, which dropped 3.75% and 3.59%, respectively.
Indian equities started the week on a weak note amid fading hopes of a peace deal between Iran and the US, along with concerns that elevated crude oil prices could hurt the domestic economy. Sentiment weakened further after Prime Minister Narendra Modi urged a spate of austerity measures aimed at conserving the country’s foreign exchange reserves.
India is reportedly considering emergency measures to shore up foreign exchange reserves, including curbing non-essential imports such as gold and electronic goods and raising fuel prices to cushion the economy from the fallout of the Iran war, Bloomberg reported, citing people familiar with the matter.
Meanwhile, crude oil prices rose for a third straight session, with Brent reclaiming the $115 a barrel mark.
Tech, EV, jewellery and realty stocks lead broad-based market selloff
Selloff intensified across large- and mid-cap technology stocks after OpenAI said it is launching a new company backed by more than USD 4 billion to help organisations build and deploy AI solutions. The losses were led by Sonata Software, Netweb Technologies, Birlasoft, and Firstsource Solutions, which fell 9%, 6.5%, 6.4%, and 4.55%, respectively.
Among large-cap technology stocks, Tech Mahindra, HCL Technologies, Tata Consultancy Services, Wipro, and Infosys declined between 3.1% and 4.4%.
EV stocks also reversed their recent gains, with Olectra Greentech, Ola Electric Mobility, and Ather Energy falling 7.3%, 5%, and 4.6%, respectively.
Jewellery stocks witnessed another round of selling pressure, with Kalyan Jewellers India falling 6% to ₹361.80 apiece, while Titan Company tanked 3.5%.
Meanwhile, real estate stocks closed with deep losses, as Anant Raj, Lodha Developers, Godrej Properties, Phoenix Mills, Aditya Birla Real Estate, and Brigade Enterprises all fell over 4%.
Fertilizer-linked stock UPL also dropped 6.4% to ₹626 apiece after Prime Minister Narendra Modi urged farmers to reduce fertiliser consumption.
Oil and fertiliser stocks outperform amid broader market carnage
Despite the broad-based selloff, some stocks managed to buck the trend, with Oil India and Oil and Natural Gas Corporation surging 7.7% and 4.8%, respectively, after brokerage CLSA termed the government’s royalty cuts on crude oil and gas production as a significant positive for both companies.
Paradeep Phosphates also ended the session with a strong gain of 4.4% at ₹127.6 apiece.
Other top gainers included Biocon, Brainbees Solutions, Afcons Infrastructure, Vedanta, Hindustan Zinc, Godrej Consumer Products and Anthem Biosciences, all of which closed with gains of over 2%.
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