Bengaluru: Indian equities dropped and the rupee slid to a record low on Monday, mirroring a broad risk-off move across Asia as an escalating Middle East conflict kept oil prices elevated and deepened concerns over growth and earnings outlook.
The Nifty 50 was down 2.2% at 22,605.50, while the BSE Sensex lost 2.13% to 72,942.20, as of 10:00 a.m. IST.
All 16 major sectors declined. The broader small-cap and mid-cap indexes dropped 3% each.
India’s equity volatility index, a measure of the market’s expected volatility over the next 30 days, jumped to 26.1, its highest since early June 2024.
The broad selloff reflects a rapid increase in risk aversion. Asian markets fell 3.3% as tensions in the Middle East intensified, undermining hopes of a near-term de-escalation in the U.S.-Israeli conflict with Iran, now in its fourth week.
The total market value of NSE-listed stocks has dropped $365 billion since the start of the Iran war.
“Renewed geopolitical tensions and consequent movements in crude oil prices will continue to act as key external drivers, dictating the market trend this week,” said Ajit Mishra, senior vice president of research at Religare Broking.
Brent crude hovering near $113 a barrel poses a particular challenge for India, one of the world’s largest oil importers. [O/R]
Elevated crude oil prices and relentless foreign outflows from domestic markets put the rupee under pressure, which weakened to a record low on Monday, eclipsing its previous low hit on Friday.
Foreign portfolio investors have sold $9.57 billion worth of Indian equities so far in March, on track for the heaviest monthly outflows since October 2024.
Among stocks, HDFC Bank, India’s largest private lender and the heaviest-weighted stock in the benchmarks, fell about 2.5% after sliding 7.4% in two sessions following the abrupt resignation of part-time chairman Atanu Chakraborty.
Shares of State Bank of India fell 3.6% after the lender got a 63.37-billion-rupee ($675.39 million) tax demand from the Income Tax Department for the assessment year 2024.
The metals sub-index fell 4%, tracking a drop in global prices.
($1 = 93.8275 Indian rupees)
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Sherry Jacob-Phillips and Mrigank Dhaniwala)
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