Indian Equity Markets Plummet: 1,000-Point Sensex Crash Driven by Rising Crude Prices

Indian Stock Market Plunges Amid Rising Oil Prices, Weak Global Cues

The Indian equity benchmark indices, Sensex and Nifty, traded sharply lower on Thursday, following a brief rebound in the previous session. Elevated crude oil prices, weak global cues, and continued foreign selling dented investor sentiment.

At 10 am, the Sensex was down 990.97 points or 1.28 percent at 76,505.39, while the broader Nifty declined to 23,859.05, down 318.60 points or 1.32 percent. Market breadth was negative, with 2,225 shares declining against 1,104 advancing, while 146 shares remained unchanged, indicating broad-based selling pressure across the market.

Sectoral indices traded in the red, barring the Nifty IT index. The Nifty Auto, metal, and PSU Bank indices were down up to 2 percent, while banking, realty, and metal stocks also saw sharp declines. The broader Nifty smallcap100 and Nifty midcap100 lost 1.4 percent and 1.68 percent, respectively.

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Elevated Crude Oil Prices Pose Inflation Risks

Brent crude, the global oil benchmark, traded 5 percent higher at USD 124 per barrel, after U.S. President Donald Trump held talks with oil companies on measures to mitigate the impact of a potential months-long blockade of Iran's ports, fuelling fears of prolonged supply disruptions. Higher oil prices pose inflation risks for India, the world's third-largest crude importer, while also threatening economic growth and corporate earnings.

Weak Global Cues and FII Selling Weigh on Markets

Global markets provided little support, with US equities ending mixed to lower overnight amid concerns over rising energy prices and a divided Federal Reserve stance. Asian markets also traded lower, tracking Wall Street weakness and rising bond yields as central banks turn cautious on inflation. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 2,468.42 crore on Wednesday, sustaining FII outflows that remain a key pressure point for domestic markets, particularly large-cap stocks.

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

Volatility Spikes Amid Uncertainty

India VIX rose over 9 percent to above 19.06, signalling heightened volatility and nervousness among investors. The rise in volatility reflects uncertainty around geopolitical developments and sharp moves in crude oil prices.

Sectoral Weakness Led by Financials, Autos

Selling was widespread across sectors, with banking stocks under pressure as both PSU and private bank indices declined over 1.5 percent each. Auto, realty, and metal stocks also traded sharply lower, indicating risk-off sentiment.

Rupee Falls to Record Low

The Indian rupee fell to a record low, as investors remained wary of the risks confronting India due to stubbornly high energy prices, while a hawkish tilt at the U.S. Federal Reserve compounded the pressure. The currency fell to 95.2325, down 0.4 percent, eclipsing its previous all-time low of 95.21 hit in late-March. The benchmark 10-year bond was quoted at Rs 96.02, with the yield up 7 bps at 7.0642%, as spike in US yields as well as oil prices hurt sentiment.