Benchmark indices Sensex and Nifty slumped nearly 1 per cent on Monday, following a massive sell-off in global equities and a sharp rise in crude prices amid intensifying tensions in West Asia. Besides, unabated foreign capital outflows and a weak rupee against the US dollar also weighed on investor sentiment, traders said. Extending losses for the second straight session, the 30-share BSE Sensex tumbled 719.08 points, or 0.97 per cent, to settle at 73,524.26. During the day, it dived 924.4 points, or 1.24 per cent, to 73,318.94. The 50-share NSE Nifty dropped 243.70 points, or 1.04 per cent, to 23,123. In intra-day trade, the benchmark lost 296.55 points, or 1.26 per cent, to 23,070.15. A total of 3,117 stocks declined, while 1,249 advanced and 171 remained unchanged on the BSE.
"Iran's missile strikes on Israel in retaliation for Israel's actions in Lebanon have pushed Brent crude prices nearly 3 per cent higher to around USD 96/bbl, raising concerns around inflation and external sector pressures. "Commodity-led inflation, weaker monsoon expectations and sustained Foreign Institutional Investor outflows are likely to keep the near-term backdrop challenging. Globally, profit booking in AI and semiconductor stocks, along with liquidity-driven selling ahead of SpaceX's mega IPO, further added to global risk-off sentiment," Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd, said. Among the Sensex constituents, Eternal, Mahindra & Mahindra, Trent, InterGlobe Aviation, Reliance Industries and Tata Consultancy Services were among the biggest laggards.
In contrast, Power Grid, Tech Mahindra, Bharat Electronics and Bharti Airtel were among the winners. The BSE SmallCap Select index tanked 1.61 per cent, and the MidCap Select index dropped 1.51 per cent. Sectorally, Realty dived 2.57 per cent, metal (2.43 per cent), Telecommunication (2.28 per cent), Commodities (2.09 per cent), Industrials (2.06 per cent), Capital Goods (1.98 per cent) and Auto (1.85 per cent). BSE Hospitals Index emerged as the only winner. "The renewed escalation, which came despite calls for restraint from the United States, heightened fears of a prolonged regional conflict and a further disruption to global energy supplies," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said. Brent crude, the global oil benchmark, jumped 4.10 per cent to USD 96.91 per barrel.
The rupee depreciated 56 paise to settle at 95.74 (provisional) against the American currency on Monday. In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng ended significantly lower. The Kospi plunged 8.29 per cent, while the Nikkei 225 index dropped 3.85 per cent. Markets in Europe were trading in the negative territory. US markets ended sharply lower on Friday. The Nasdaq Composite tanked 4.18 per cent, while the S&P 500 dropped 2.64 per cent and the Dow Jones Industrial Average declined 1.35 per cent. "Global sentiment has weakened amid a flare-up of tensions in the Middle East, pushing crude towards USD 100/bbl. Simultaneously, global technology stocks have witnessed a sell-off, as investors begin to question the sustainability of the AI-led rally. "Selling pressure was also seen in semiconductor-heavy indices, showing early signs of valuation fatigue and positioning unwind, although it is premature to classify this as a trend reversal," Vinod Nair, Head of Research, Geojit Investments Limited, said. Meanwhile, Foreign Institutional Investors (FIIs) offloaded equities worth Rs 8,776.25 crore on Friday, according to exchange data. On Friday, the Sensex declined 116.67 points, or 0.16 per cent, to settle at 74,243.34. The Nifty dipped 49.85 points, or 0.21 per cent, to end at 23,366.70.