A sharp escalation in geopolitical tensions in West Asia triggered one of the steepest sell-offs on Dalal Street this year, erasing nearly ₹8 lakh-crore in investor wealth on Wednesday.
Rising crude oil prices, fears of weaker corporate earnings and renewed foreign investor selling combined to drag benchmark indices sharply lower, while defensive sectors such as pharmaceuticals bucked the broader market trend.
The sell-off followed renewed military exchanges between the US and Iran, raising concerns over global oil supplies and the outlook for inflation and economic growth.
The Nifty 50 index opened lower at 24,259 and finally finished at 23,897, logging an intraday loss of 500 points. The BSE Sensex had a gap-down opening at 77,816. The 30-stock index touched an intraday low of 76,259, but finally finished at 76,522, logging an intraday loss of 1658 points. Likewise, the Bank Nifty index opened downside at 57,918 and touched an intraday low of 56,549. However, the index finally ended at 56,742, recording an intraday loss of 1,458 points.
Sensex: 76,522.08 (-1,658.32 points, -2.12%)
Nifty 50: 23,897.40 (-499.95 points, -2.05%)
Bank Nifty: 56,742.15 (-1,458 points)
The market rout wiped out around ₹8 lakh crore from the market capitalisation of BSE-listed companies.
The total market value of listed firms fell from around ₹480 lakh crore on Tuesday to about ₹472 lakh crore by the close of Wednesday's trading, reflecting widespread selling across sectors.
Thirteen of the 16 major sectoral indices ended in the red.
The surge in global crude oil prices weighed heavily on sectors dependent on fuel costs.
Key losers included:
Oil marketing companies such as BPCL, HPCL and Indian Oil
Paint manufacturers led by Asian Paints
Aviation stocks including IndiGo
Tyre companies
FMCG stocks
The oil and gas index declined about 1.5 percent, while auto and FMCG indices also registered notable losses.
In contrast, upstream energy companies ONGC and Oil India gained modestly as higher crude prices are expected to improve their earnings.
Among Nifty stocks, Asian Paints, IndiGo and ITC were among the biggest losers.
Investors shifted towards relatively defensive sectors amid heightened uncertainty.
Pharmaceutical and healthcare stocks ended higher as they are considered less vulnerable to fluctuations in oil prices and geopolitical shocks.
Info Edge gained over 3 percent after reporting a strong business update for the June quarter, while Kalyan Jewellers surged more than 5 percent on upbeat quarterly business performance.
Fresh military action between the United States and Iran intensified concerns about stability in West Asia, prompting investors to reduce exposure to risk assets across global markets.
Higher crude prices are a major concern for India, one of the world's largest oil importers. Expensive oil increases the country's import bill, fuels inflation and raises concerns over corporate profitability and economic growth.
Investors are becoming increasingly cautious ahead of the June quarter earnings season. Analysts expect geopolitical uncertainty and higher input costs to weigh on corporate earnings, leading to profit-booking.
Foreign institutional investors have resumed selling Indian equities amid rising global uncertainty and weakness in the rupee against the US dollar, adding pressure to benchmark indices.
Risk aversion intensified during the session, with volatility indicators rising sharply. The jump in market uncertainty prompted investors to lock in profits, resulting in broad-based selling across most sectors.
Market participants are expected to remain cautious in the coming sessions as developments in the US-Iran conflict, movements in crude oil prices and the upcoming corporate earnings season are likely to determine the near-term direction of Indian equities. Until geopolitical tensions ease, volatility is expected to remain elevated.
