India’s stock market has crashed, with the benchmark Sensex plunging 1,045 points and the Nifty 50 falling 1.64%, as oil prices surged above $102 per barrel and concerns over higher interest rates and continued foreign investor selling rattled investors.
The decline wiped out more than INR11 lakh crore from the combined market value of companies listed on the Bombay Stock Exchange (BSE), putting pressure on investors amid growing uncertainty over the global economic outlook.
The Sensex closed at 71,593.24 points, down 1,045.46 points, or 1.44%, while the Nifty 50, India’s other major stock index, fell 371.25 points, or 1.64%, to settle at 22,231.80.
The downturn came as the Reserve Bank of India (RBI) raised interest rates for the first time in nearly four years.
Higher interest rates can increase borrowing costs for businesses and households, potentially slowing spending and investment.
The central bank also shifted its policy stance from “neutral” to “calibrated tightening”, signalling that further rate increases could follow.
Meanwhile, market analysts expect two additional increases of 25 basis points each during the current cycle, according to VK Vijayakumar, chief investment strategist at Geojit Investments Limited.
Rising oil prices also added to investor concerns. Brent crude climbed above $102 per barrel as attacks on shipping in the Gulf raised fears over the security of supplies passing through the Strait of Hormuz, a major route for international oil shipments.
Higher oil prices are a concern for India because the country relies heavily on imported crude. More expensive fuel can increase transport and production costs, adding to pressure on household budgets and businesses.
Foreign investors also continued to withdraw money from Indian shares.
Overseas funds sold equities worth more than INR6,121 crore on Wednesday, taking their net sales to nearly Rs57,000 crore over nine consecutive trading sessions, according to provisional data from the National Stock Exchange.
Major companies, including ITC, Adani Ports, IndiGo, Power Grid and Reliance Industries, were among Thursday’s biggest losers, with their shares falling by as much as 4%.
However, Titan and technology companies such as Tech Mahindra, HCL Technologies, Tata Consultancy Services and Infosys gained up to 2%, providing limited support to the market.
Uncertainty over future US interest rate decisions and rising American government bond yields also weighed on investor confidence, adding to pressure on emerging markets such as India.
