Sensex Crashes 1,045 Points, Nifty Hits 21-Month Low As Crude Surges Past $104

Indian equity markets suffered a sharp sell-off on Thursday, with the Sensex plunging 1,045 points and the Nifty sliding to a 21-month low as surging crude oil prices, persistent foreign fund outflows and fears of tighter monetary conditions weighed heavily on investor sentiment.

The 30-share BSE Sensex fell 1,045.46 points, or 1.44 per cent, to close at 71,593.24, extending its decline for a second consecutive session. During the day, the index dropped as much as 1,310.95 points to 71,327.75, a level last seen around February 2024.

The Nifty declined 371.25 points, or 1.64 per cent, to 22,231.80, its lowest closing level in 21 months. It touched an intra-day low of 22,179.90, also marking a fresh 52-week low.

The sell-off was broad-based, with all BSE sectoral indices ending in the red. Power, Utilities, Metals, Realty and Capital Goods were among the worst-hit sectors, while the BSE SmallCap Select and MidCap Select indices fell 2.58 per cent and 2.53 per cent, respectively.

Among Sensex constituents, ITC was the biggest loser, falling 4.24 per cent, followed by InterGlobe Aviation, Power Grid, Bharat Electronics, Adani Ports and NTPC. Tech Mahindra, Axis Bank and Infosys managed to finish higher.

A fresh surge in crude added to concerns. Brent crude jumped 4.25 per cent to USD 104.50 a barrel, raising fears of renewed inflationary pressure for an economy heavily dependent on imported oil.

The market reaction also came a day after the RBI raised the repo rate by 25 basis points to 5.50 per cent, its first increase in nearly four years, and shifted its policy stance from neutral to “calibrated tightening”. The move signalled that rate cuts are unlikely in the near term and that further tightening remains possible if inflationary pressures persist.

Foreign investors have also remained a major source of pressure, with FIIs selling equities worth Rs 6,121.37 crore on Wednesday.

Analysts said elevated US Treasury yields, a weakening rupee, high crude prices and continued foreign selling were combining to increase risk aversion across markets.

The weakness was not confined to India. Asian markets including Japan, South Korea, Hong Kong and Shanghai ended lower, while European markets were also trading in negative territory. US equities had closed lower on Wednesday.

The Sensex had already fallen 429.11 points and the Nifty 173.05 points on Wednesday, making Thursday's slide a sharp continuation of the market's recent decline.