Indian equity markets witnessed a sharp selloff on Monday after Prime Minister Narendra Modi urged citizens to reduce fuel consumption, avoid buying gold for a year and limit foreign travel amid mounting pressure from the West Asia conflict.
Investors interpreted the remarks as a signal that the government may be preparing tougher economic measures, including possible fuel price hikes or import curbs to protect forex reserves and contain the import bill.
The benchmark indices recorded their steepest single-day decline since March 30.
Sensex fell 1.7 percent
Nifty 50 declined 1.49 percent
Nifty Midcap index dropped 1 percent
Nifty Smallcap index slipped 1.06 percent
The Nifty closed near the lower end of its recent trading range at 23,815.85, indicating rising selling pressure.
The broader market selloff wiped out around ₹6.1 trillion in BSE market capitalisation, which fell to ₹467 trillion.
The selloff was broad-based, particularly across sectors vulnerable to rising fuel prices and possible consumption curbs.
Titan Company fell 6.85 percent
InterGlobe Aviation declined 5.73 percent
Indian Oil Corporation dropped sharply
Bharat Petroleum Corporation declined
Hindustan Petroleum Corporation also fell significantly
Heavyweight stocks added to the pressure:
Reliance Industries fell 3.48 percent
Bharti Airtel slipped 3.79 percent
State Bank of India dropped 4.36 percent
Brent crude prices surged 3 percent to above $103 per barrel during Monday’s trade as tensions in West Asia intensified.
According to Prashant Vashisht of Icra, oil marketing companies are already facing severe pressure.
At crude prices of $120–125 per barrel, OMCs could incur losses of around ₹1,000 crore per day on auto fuels and domestic LPG sales
Higher petrol and diesel prices may push up inflation
Food inflation risks are already elevated due to heatwave conditions and monsoon uncertainty
Market participants fear that higher energy prices could reverse India’s recent success in controlling inflation.
Pranjul Bhandari of HSBC said the combined impact of:
energy shocks,
El Nino conditions,
and heatwaves
could push headline inflation to an average of 5.6 percent in FY27.
This comes after headline inflation averaged just 2.06 percent in FY26.
Only a few defensive sectors managed to stay positive amid the market weakness.
Nifty Pharma rose 0.25 percent
Nifty FMCG edged up 0.08 percent
Fund managers said most companies have so far managed costs using existing inventories, but higher input costs may begin affecting corporate earnings from the next quarter onwards.
(By arrangement with livemint.com)
