Sensex Slides 456 Points as Banking Stocks and Costly Crude Weigh on Markets

Indian equity benchmarks closed lower on Friday, snapping a two-session winning streak as banking and financial stocks came under heavy selling pressure while elevated crude oil prices and geopolitical uncertainty dampened investor confidence.

The BSE Sensex fell 455.59 points (0.58%) to settle at 78,499.17, after plunging as much as 577.69 points during intra-day trade. The NSE Nifty50 slipped 65.35 points (0.27%) to close at 24,570.65, having touched an intraday low of 24,522.75.

Among the biggest losers, Bajaj Finance tumbled 5.90%, while Bajaj Finserv declined 4.18%. ICICI Bank, Axis Bank, Trent and Asian Paints also ended lower, reflecting broad weakness across financial counters. On the positive side, Tata Consultancy Services, Mahindra & Mahindra, State Bank of India and Tech Mahindra provided limited support to the benchmarks.

Investor sentiment remained cautious as Brent crude hovered above USD 80 per barrel, despite easing 0.35% to USD 82.20. Higher oil prices are closely monitored because they can increase India's import bill, fuel inflation and pressure corporate margins.

According to exchange data, Foreign Institutional Investors (FIIs) sold equities worth Rs 17.86 crore on Thursday, adding to market caution.

Market experts said uncertainty surrounding developments in the Strait of Hormuz and fresh regulatory proposals affecting the non-bank lending sector prompted investors to reduce exposure to financial stocks despite an otherwise encouraging corporate earnings season.

During the week, benchmark indices also adjusted to the implementation of the new closing auction mechanism for stocks with futures and options (F&O) contracts. The revised process aims to improve transparency and strengthen price discovery in the equity cash segment.

Elsewhere in Asia, Japan's Nikkei and South Korea's KOSPI ended lower, while Shanghai and Hong Kong markets advanced. European markets traded higher, whereas US equities had closed in negative territory overnight.