Stock investors lost around Rs 10 lakh crore due to a market crash on Thursday, as a sharp spike in crude oil prices and growing prospects of tighter domestic and global monetary conditions triggered across-the-board selling.
The benchmark BSE Sensex tumbled 1,045 points, or 1.44 per cent, to settle at 71,593.24 - its lowest closing level in more than two-and-a-half years. During the day, it slumped 1,310.95 points, or 1.80 per cent, to 71,327.75.
The market capitalisation of BSE-listed companies eroded by Rs 10,01,898.68 crore to Rs 4,60,97,032 crore (USD 4.76 trillion) in a single day.
"Indian equities extended their decline as a combination of tighter domestic monetary policy expectations, persistent foreign selling and renewed oil-price pressure weighed on risk appetite. Brent crude rose sharply above USD 104 a barrel intraday following renewed Middle East tensions, reviving concerns over imported inflation.
"The US 10-year Treasury yield holding near 5.3 per cent and further rupee weakness added to the pressure by strengthening the relative appeal of dollar-based assets. Together, these factors raise the prospect of tighter financial conditions and elevated inflationary pressures persisting for longer," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said.
So far this year, the Sensex has lost 13,627.36 points, or 16 per cent. The 50-share NSE Nifty dived 3,897.8 points, or 14.91 per cent.
Brent crude, the global oil benchmark, jumped 4.25 per cent to USD 104.5 per barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 6,121.37 crore on Wednesday, according to exchange data.
"The domestic market continued in its sharp sell-off mode as the ripple effects of hawkish RBI policy weighed on rate-sensitive sectors, effectively resetting near-term valuation multiples. This headwind was further amplified by persistent FII outflows, harder bond yields, and a depreciating INR. Moreover, volatile crude oil prices hovering stubbornly above the USD 100 mark continue to be a hurdle for the national economy," Vinod Nair, Head of Research, Geojit Investments Limited, said.
From the 30 Sensex firms, ITC, InterGlobe Aviation, Power Grid, Bharat Electronics, Adani Ports and NTPC were among the major laggards.
Tech Mahindra, Axis Bank and Infosys were the winners.
Ajit Mishra, SVP's Research, Religare Broking, said that selling was broad-based, with metal, realty and energy among the major laggards, while IT was the only sector showing some relative resilience. The broader market witnessed even sharper selling, with both midcap and smallcap indices declining over 2 per cent, indicating a clear risk-off tone and deterioration in market breadth.
The BSE SmallCap Select index dived 2.58 per cent and MidCap Select index tumbled 2.53 per cent.
All BSE sectoral indices ended lower. Power slumped 3.51 per cent, Metal 3.34 per cent, Utilities 3.38 per cent, Realty 3.07 per cent, Capital Goods 3.02 per cent, Industrials 2.93 per cent, Services 2.76 per cent and Commodities 2.71 per cent.
A total of 3,426 stocks declined, while 1,003 advanced and 225 remained unchanged on the BSE.