Mumbai: Indian equities slumped for a second straight session on Thursday, with the Sensex losing 1,045 points and the Nifty closing at a 21-month low as surging crude prices and concerns over tighter monetary conditions triggered broad-based selling.
The 30-share BSE Sensex fell 1,045.46 points, or 1.44 percent, to 71,593.24, its lowest closing level in more than two-and-a-half years. It had last closed near this level on February 13, 2024. Intraday, the index plunged 1,310.95 points to 71,327.75.
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The NSE Nifty declined 371.25 points, or 1.64 percent, to 22,231.80. It touched an intraday 52-week low of 22,179.90 before recovering some ground.
Brent crude jumped 4.25 percent to USD 104.5 a barrel, intensifying inflation concerns a day after the Reserve Bank of India raised the repo rate by 25 basis points to 5.50 percent — its first increase in nearly four years.
The RBI’s Monetary Policy Committee unanimously backed the hike and shifted its stance from neutral to calibrated tightening, signalling that rate cuts were off the table in the near term and further increases remained possible.
"The domestic market continued in its sharp sell-off mode as the ripple effects of hawkish RBI policy weighed on rate-sensitive sectors, effectively resetting near-term valuation multiples. This headwind was further amplified by persistent FII outflows, harder bond yields, and a depreciating INR," said Vinod Nair, Head of Research, Geojit Investments Limited.
Foreign institutional investors sold equities worth Rs 6,121.37 crore on Wednesday, according to exchange data.
ITC led the Sensex losses, falling 4.24 percent, followed by InterGlobe Aviation at 3.36 percent, Power Grid at 3.16 percent and Bharat Electronics at 3.1 percent. Adani Ports declined 2.59 percent and NTPC shed 2.43 percent. Tech Mahindra, Axis Bank and Infosys were among the gainers.
The sell-off spread across the broader market. The BSE SmallCap Select index dropped 2.58 percent and the MidCap Select index fell 2.53 percent. Declining stocks outnumbered advancing shares by more than three to one: 3,426 stocks fell, 1,003 rose and 225 remained unchanged.
All BSE sectoral indices ended lower. Power dropped 3.51 percent, utilities 3.38 percent, metals 3.34 percent and realty 3.07 percent. Capital goods, industrials, services and commodities also suffered sharp losses.
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Ponmudi R, CEO of Enrich Money, said higher crude prices were reviving concerns over persistent inflation, while elevated US Treasury yields and continued foreign selling added to the pressure.
Global markets offered little support. Major indices in South Korea, Japan, mainland China and Hong Kong ended sharply lower. European markets traded in negative territory after US stocks declined on Wednesday.
The Sensex had lost 429.11 points and the Nifty 173.05 points in the previous session.
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