Indian equities witnessed a brutal selloff Monday as investors scrambled to exit positions amid surging crude oil prices, geopolitical tensions and a weakening rupee.
According to Indian media reports, the benchmark Sensex nosedived nearly 1,200 points while the Nifty 50 slipped over one percent, triggering a massive erosion of wealth.
Exchange data showed the market capitalisation of Bombay Stock Exchange (BSE) listed firms fell from INR 473.5 trillion to INR 469 trillion, wiping out INR 4 trillion in investor wealth in a single trading session.
The routing was broad-based, with mid-cap and small-cap indices also tumbling, reflecting widespread panic across sectors. Drivers of the selloff included brent crude surging past $104 per barrel after reports of possible disruptions in the Strait of Hormuz, raising fears of inflationary pressures and a ballooning import bill for India; the breakdown of US-Iran peace talks rattling global markets and the INR’s slide against the US dollar heightening concerns over foreign capital outflows and rising costs of imports.
Prime Minister (PM) Narendra Modi’s appeal for austerity, urging citizens to cut back on petrol, diesel, gold purchases and foreign travel, added to investor anxiety, particularly in consumption-driven sectors.
Market experts warn that volatility may persist if crude prices remain elevated and geopolitical tensions escalate. “The combination of global uncertainty and domestic policy signals has unnerved investors. Unless oil stabilises, the pressure on equities will continue,” said a senior analyst at a leading brokerage.
