Stock markets ended sharply lower on September 28, with benchmark indices falling to near six-month lows as rising crude oil prices and elevated global bond yields weighed on investor sentiment.
The Nifty 50 declined 1.56% to close at 22,780.25, while the Sensex fell 1.52% to 72,771.72. The benchmarks have now lost nearly 6% over the past seven weeks, extending one of their longest weekly losing streaks.
Crude oil prices moved higher after talks between the United States and Iran failed to make progress.
US President Donald Trump said he had rejected an Iranian proposal related to reopening the Strait of Hormuz and ending the conflict. Iran, meanwhile, maintained that diplomacy remained the only way to resolve its confrontation with the US and Israel.
The lack of progress raised concerns over oil supplies through the Strait of Hormuz, a key global energy shipping route. Brent crude futures rose about 3.7% to $108 a barrel.
Higher crude prices are a major concern for India, which is heavily dependent on imported oil. A sustained rise in crude could increase the country's import bill, add to inflationary pressures and squeeze corporate margins.
Selling was seen across the market, with all 16 major sectoral indices ending in the red.
The Nifty Smallcap 100 fell around 1.9%, while the Nifty Midcap 100 declined 1.6%. Financial stocks were among the major drags. The Nifty Financial Services index lost about 1.7%, while the Nifty Bank index declined 2%.
Among heavyweight stocks, HDFC Bank and Reliance Industries fell 2.3% each, while ICICI Bank declined 1.9%.
Higher US Treasury yields also contributed to the weakness in emerging markets.
Elevated bond yields can make dollar-denominated fixed-income investments more attractive to global investors, potentially reducing foreign capital flows into markets such as India. They can also increase borrowing costs worldwide.
Investors are now likely to closely track crude oil prices, global bond yields, foreign institutional investor activity and further developments in the US-Iran conflict.
