Indian Equities Plummet to 11-Month Low Amid Global Market Volatility

Market Update

Indices Tumble 2-3% Amid Global Crude Oil Price Surge

The Sensex plummeted 2,345.89 points, or 2.97%, to 76,573.01, while the Nifty dropped 708.75 points, or 2.89%, to 23,741.70 on Monday, dragged down by a sharp surge in global crude oil prices, weak global cues, and persistent foreign fund outflows.

Sectoral Indices Trading in the Red

Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data

All 16 major sectoral indices traded in the red, with the Nifty Smallcap100 and Nifty Midcap100 indices falling about 3% each. The crude oil surge weighed heavily on the market, with Brent crude spiking 26% to around USD 119 per barrel, its highest level since July 2022.

Weak Global Cues and FII Outflow

Asian markets witnessed a sharp sell-off, with South Korea's Kospi tumbling over 7% and Japan's Nikkei 225 declining 6.5%. Foreign Institutional Investors (FIIs) continued their selling spree, offloading equities worth Rs 6,030.38 crore on Friday.

Rupee Falls to 92.28 Against USD

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline

The rupee fell 46 paise to 92.28 against the USD in early trade on Monday, nearing its all-time intra-day low, amid a surge in crude oil prices and strengthening of the American currency.

India VIX Jumps to 24.18

India VIX, the market's volatility gauge or fear index, jumped over 21% to 24.18, its highest level in 21 months. A spike in volatility indicates rising uncertainty and risk perception among investors, often leading to increased selling in equities.

Selling in Banking Shares

Public sector banks declined over 5% after sliding 6.5% last week on fears that higher crude prices could lift borrowing costs, push bond yields up, and compress treasury gains. Top private lenders HDFC Bank and ICICI Bank dropped over 3%.

Market Outlook

The Nifty may head towards 23,535, which would complete a 61.8% retracement of the upmove since March 2025. A breach of the same could open the door for further downside, initially targeting the March 2025 low near 22,000 and the November 2023 low around 19,000.