Indian stock markets extended their decline for a third consecutive session on Thursday as rising crude oil prices, escalating tensions in West Asia and weak global cues weighed on investor sentiment. The Sensex fell 460 points, while the Nifty 50 closed below 22,700, with selling pressure affecting several sectors and broader market indices.
The 30-share BSE Sensex dropped 460.30 points, or 0.62%, to settle at 73,249.39. During the session, it fell as much as 704.58 points to an intraday low of 73,005.11.
The NSE Nifty 50 declined 123.70 points, or 0.54%, to close at 22,687.65. The index touched an intraday low of 22,554.85 before recovering some of its losses towards the end of the session.
The decline came a day after both benchmark indices ended lower on Wednesday, extending a period of caution among investors. The latest sell-off reflected concerns that rising energy prices could increase inflationary pressures and affect India’s economic outlook.
Despite the broader weakness, some stocks managed to end the session higher. Bajaj Finance, UltraTech Cement, ICICI Bank, Sun Pharmaceutical Industries and State Bank of India were among the gainers in the Sensex pack. Bharti Airtel, Adani Ports, Tata Steel, Kotak Mahindra Bank, HCL Technologies and Bajaj Finserv also featured among the stocks that advanced.
On the losing side, Reliance Industries, Eternal, HDFC Bank, Power Grid, Trent and Asian Paints were among the major laggards. Infosys, ITC, Bharat Electronics, Mahindra & Mahindra, Tata Consultancy Services and Larsen & Toubro also faced selling pressure.
The mixed performance showed that investors were selective, with gains in a few banking, financial and industrial stocks unable to offset declines in several heavyweight shares.
The broader market performed worse than the benchmark indices. Midcap stocks fell around 1%, while smallcap shares declined approximately 1.2%, reflecting selling across a wider section of the market.
A major concern for investors was the rise in international crude oil prices. Brent crude, the global oil benchmark, climbed around 3% to trade above $112 a barrel amid escalating tensions in West Asia and reports of attacks affecting Saudi oil infrastructure.
Higher crude prices pose a challenge for India because the country imports a substantial share of its oil requirements. A sustained rise in prices can increase the import bill, put pressure on the rupee and raise transportation and production costs.
For companies, higher fuel and logistics expenses can reduce profit margins unless they are able to pass on the additional costs to consumers. Investors also worry that rising energy prices could push inflation higher and complicate the outlook for interest rates.
The Reserve Bank of India’s latest monetary policy discussions have also drawn attention to inflation risks. Comments in the minutes of its recent policy meeting indicated that further rate increases could be needed to contain inflation, although policymakers remained mindful of the risks to economic growth.
Indian equities tracked a broad decline across Asian markets. South Korea’s Kospi fell 3.52%, Hong Kong’s Hang Seng dropped 3.03%, Japan’s Nikkei 225 declined 2.40% and China’s Shanghai Composite lost 1.48%.
Uncertainty over the conflict in West Asia and the possibility of disruptions to energy supplies kept global investors cautious. European markets also traded lower during the session.
Thirteen of the 16 major Indian sectoral indices registered losses, according to Reuters. Information technology, energy and fast-moving consumer goods stocks were among the sectors under pressure.
The rise in India’s volatility index also reflected growing uncertainty. Higher volatility often leads investors to reduce exposure to riskier assets, particularly when geopolitical developments and commodity prices are moving sharply.
Buying by institutional investors offered some support but was not enough to reverse the market’s direction. Foreign institutional investors purchased equities worth Rs 1,022.32 crore on Wednesday, while domestic institutional investors bought shares worth Rs 1,614.32 crore, according to exchange data.
The purchases suggest that some investors continued to find opportunities despite the recent decline. However, the immediate direction of the market remained tied to oil prices, global sentiment and concerns over inflation.
The near-term outlook for Dalal Street is likely to depend on developments in West Asia, movements in crude oil prices and upcoming corporate earnings. A sustained fall in oil prices could ease concerns about inflation and corporate costs, while further escalation in the region may keep markets volatile.
Investors will also monitor global market movements and domestic economic signals for clues about the strength of demand and the outlook for interest rates.