Indian equity benchmarks ended sharply lower on Monday as rising crude oil prices, escalating tensions in West Asia, higher global bond yields and continued foreign fund outflows weighed heavily on investor sentiment.
The Sensex plunged 1,124.02 points, or 1.52 per cent, to close at 72,771.72, while the Nifty declined 360.25 points, or 1.56 per cent, to settle at 22,780.25. Selling was broad-based, with large-cap, mid-cap and small-cap stocks all witnessing pressure.
Among Nifty constituents, Tata Motors Passenger Vehicles (TMPV), Power Grid and Jio Financial Services emerged as the top laggards.
Broader market also under pressure
The weakness extended to the broader market, with the Nifty MidCap 100 falling 1.63 per cent and the Nifty SmallCap 100 ending 1.85 per cent lower.
Investor sentiment remained fragile as concerns grew that the ongoing conflict in West Asia could disrupt global energy supplies further and add to inflationary pressures.
Market participants reacted nervously after US President Donald Trump rejected an Iranian proposal aimed at reopening the Strait of Hormuz and easing hostilities. Iran, meanwhile, maintained that diplomacy remained the only solution to its conflict with the United States and Israel.
Global markets turn cautious
The geopolitical uncertainty triggered a broader risk-off mood across global financial markets. Major Asian markets also ended lower, with South Korea declining nearly 2 per cent, Japan's Nikkei slipping 0.10 per cent and Chinese equities falling more than 1 per cent.
Rising crude oil prices further added to concerns. Brent crude futures gained 2.2 per cent to $106.6 per barrel, while US West Texas Intermediate (WTI) crude climbed 1.45 per cent to $93.76 per barrel.
Higher energy prices remain a key concern for India, which depends heavily on crude imports and could face additional inflationary pressure if oil prices remain elevated.
Bond yields add to market pressure
Global bond yields also moved higher as investors reassessed inflation risks. The sell-off in bond markets intensified, with yields on rate-sensitive US two-year Treasury notes rising five basis points to 4.90 per cent, while the benchmark 10-year Treasury yield advanced four basis points to 5.20 per cent.
Higher yields in developed markets can reduce the attractiveness of emerging-market assets, including Indian equities, as investors reassess returns and risk.
Foreign investors continue selling Indian equities
Foreign portfolio investors (FPIs) remained another source of pressure on domestic markets. After turning net buyers in July and August, overseas investors have become net sellers in September.
According to NSDL data, FPIs have offloaded Indian equities worth Rs 17,131 crore so far this month, taking their total net selling for the year to Rs 2.41 trillion.
Rupee weakens
Meanwhile, the rupee traded 0.19 per cent lower at 96.00 against the US dollar, with dollar strength and elevated crude oil prices continuing to weigh on the currency.
The combination of geopolitical uncertainty, rising oil prices, higher global yields and persistent foreign outflows kept investors cautious, resulting in a sharp sell-off across Indian equities.
