Oil, RBI rate shock and FIIs deliver triple blow to markets

Mumbai: Benchmark stock index Sensex tanked 1,045 points while Nifty slid to a 21-month low on Thursday following heavy selling in rate-sensitive, commodities and FMCG shares amid a sharp spike in crude oil prices and growing prospect of tighter domestic and global monetary conditions.

Falling for the second day running, the 30-share BSE Sensex tumbled 1,045.46 points, or 1.44 per cent, to settle at a more than two-and-a-half-year low of 71,593.24. During the day, it slumped 1,310.95 points, or 1.80 per cent, to 71,327.75. The BSE barometer had previously closed near this level on February 13, 2024.

The 50-share NSE Nifty dropped 371.25 points, or 1.64 per cent, to end at a 21-month low of 22,231.80. During the day, it fell 423.15 points, or 1.87 per cent, to a low of 22,179.90 -- also its intra-day 52-week low.

From the 30 Sensex firms, ITC was the biggest loser, down by 4.24 per cent. InterGlobe Aviation dropped 3.36 per cent, Power Grid by 3.16 per cent, Bharat Electronics by 3.1 per cent, Adani Ports by 2.59 per cent and NTPC by 2.43 per cent. Tech Mahindra, Axis Bank and Infosys were the winners. 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," Vinod Nair, Head of Research, Geojit Investments Limited, said. Moreover, volatile crude oil prices hovering stubbornly above the $100 mark continue to be a hurdle for the national economy, he added. 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. On Wednesday, the Sensex fell 429.11 points, or 0.59 per cent, to settle at 72,638.70.

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