Stock markets extended their losing streak for a third straight session on Monday, with the benchmark Sensex plunging 1,313 points as rising crude oil prices rattled investor sentiment following the failure of peace talks between the US and Iran over the ongoing West Asia conflict.
The 30-share BSE Sensex slumped 1,312.91 points, or 1.70 per cent, to close at 76,015.28. During intraday trade, the index dropped as much as 1,370.79 points, or 1.77 per cent, to 75,957.40.
Analysts also pointed to Prime Minister Narendra Modi’s call for austerity measures, which added to concerns over forex reserves, rising fuel prices, and the broader consumption outlook.
6.4 lakh crore in investor wealth wiped out
It was a particularly brutal session for Indian benchmark indices Sensex and Nifty, which recorded their steepest single-day decline since March 30. The NSE Nifty50 tumbled 1.49 per cent to settle at 23,815.85, while the BSE Sensex plunged 1.70 per cent to close at 76,015.28, according to reports.
The sharp sell-off wiped out nearly ₹6.4 lakh crore in investor wealth on Monday, based on the decline in the total market capitalisation of NSE-listed companies.
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Top 5 reasons behind the Sensex fall
1. Rising geopolitical tensions in West Asia
Investor sentiment remained under pressure after US President Donald Trump rejected Iran’s response to the latest peace proposal, calling it “totally unacceptable”. The remarks dimmed hopes of an immediate diplomatic breakthrough and fuelled fears of further escalation in the region.
2. Crude oil prices spike sharply
The sharp rise in crude oil prices became the biggest trigger for the sell-off. According to Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services, Brent crude jumped nearly 4 per cent to around USD 105.7 per barrel, worsening concerns around inflation, fuel costs and India’s external balances.
3. PM Modi’s austerity appeal worries markets
Analysts said Prime Minister Narendra Modi’s remarks on conserving foreign exchange added to market anxiety. Addressing a rally in Hyderabad on Sunday, Modi urged citizens to reduce fuel consumption, postpone gold purchases and avoid non-essential foreign travel for one year amid the ongoing West Asia crisis.
He also encouraged the use of metro rail services, carpooling, electric vehicles, railway parcel services and work-from-home arrangements to reduce fuel dependence.
Hariprasad K, Research Analyst and Founder of Livelong Wealth, said the market interpreted the speech as a signal of mounting macroeconomic stress.
“While global uncertainty surrounding the US-Iran conflict and surging crude oil prices had already weakened sentiment, the Prime Minister’s appeal for austerity measures amplified investor concerns around India’s forex reserves, fuel costs, and consumption outlook,” he said.
4. Heavy selling in jewellery and consumer stocks
Jewellery stocks came under intense selling pressure after the PM’s remarks on postponing gold purchases. Sky Gold and Senco Gold fell more than 12 per cent during intraday trade before recovering slightly. Senco Gold eventually closed 7.8 per cent lower.
Consumer durable and discretionary stocks also saw sharp declines amid fears of weakening demand.
5. Foreign investors continue to sell equities
Foreign Institutional Investors (FIIs) continued their selling spree, offloading equities worth ₹4,110.60 crore on Friday, according to exchange data. Persistent foreign outflows added further pressure on domestic markets.
Sector-wise, the BSE Consumer Durables index fell 3.76 per cent, Realty declined 2.74 per cent, PSU Banks dropped 2.28 per cent, while Power and Consumer Discretionary indices also ended sharply lower. Healthcare and hospital stocks, however, managed to stay resilient.
Broader markets also remained under pressure, with the BSE MidCap Select index falling 1.09 per cent and the SmallCap Select index slipping 0.44 per cent. Overall market breadth remained weak, with 2,892 stocks declining against 1,457 advances on the BSE.
“The benchmark index slipped below the 24,000 mark as renewed Gulf tensions and fears around rising crude prices weighed heavily on investor sentiment,” said Vinod Nair, Head of Research at Geojit Investments Limited.