Equity benchmark indices BSE Sensex and NSE Nifty 50 extended their losses for the third consecutive session on Friday, as surging crude oil prices heightened fears of inflation and economic instability amid escalating tensions in West Asia.
Heavy selling in global markets, persistent foreign fund outflows, and continued weakness in the rupee also dampened investor sentiment. The 30-share BSE Sensex plunged 1,579.82 points, or 2 per cent, to 74,454.60 during intra-day trade. The benchmark later recovered slightly but still ended the session at 74,563.92, down 1,470.50 points, or 1.93 per cent. On the BSE, as many as 3,348 stocks declined, while 941 advanced and 132 remained unchanged.
Meanwhile, the 50-share Nifty index dropped sharply by 488.05 points, or 2.06 per cent, to close at 23,151.10. According to Hariprasad K, Research Analyst and Founder of Livelong Wealth, the steep correction in equities has largely been driven by the spike in crude oil prices and rising macroeconomic concerns for energy-importing economies such as India.
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The market capitalisation of BSE-listed companies declined by Rs 10,24,181.74 crore to Rs 4,29,82,252.27 crore (USD 4.65 trillion) during Friday’s session.
On a weekly basis, the BSE benchmark index dropped 4,354.98 points, or 5.51 per cent, while the Nifty fell 1,299.35 points, or 5.31 per cent. Since February 27, the Sensex has plunged 6,723.27 points, or 8.27 per cent. During the same period, the total market valuation of BSE-listed firms has eroded by Rs 33,68,419 crore to Rs 4,29,82,252.27 crore (USD 4.65 trillion).
Ajit Mishra, SVP (Research) at Religare Broking Ltd, said investor sentiment remained fragile amid escalating geopolitical tensions in the Middle East, which have pushed crude oil prices close to the USD 100 per barrel mark. “The situation has also led to continued foreign institutional investor outflows and weakness in the rupee, which slipped to record lows during the session, further affecting market sentiment,” he added.
Among the Sensex constituents, Larsen & Toubro recorded the steepest fall, plunging 7.52 per cent. Other major laggards included Tata Steel, State Bank of India, Bharat Electronics, Maruti Suzuki and UltraTech Cement. On the other hand, Hindustan Unilever and Bharti Airtel managed to post gains.
Broader markets also faced selling pressure, with the BSE midcap index dropping 2.87 per cent and the smallcap index declining 2.48 per cent. Vinod Nair, Head of Research at Geojit Investments Limited, said metal and automobile stocks were among the worst affected sectors as supply disruptions and higher input costs are expected to impact business operations and profitability.
Among sectoral indices on the BSE, Metal recorded the sharpest decline of 4.83 per cent, followed by Industrials (4.15 per cent), Commodities (4.01 per cent), PSU Bank (3.73 per cent), Auto (3.27 per cent), MidSmall Private Banks Quality (3.13 per cent), Capital Goods (2.99 per cent), and Consumer Discretionary (2.69 per cent). Global oil benchmark Brent Crude rose 0.25 per cent to USD 100.7 per barrel.
Meanwhile, the Indian rupee weakened by 20 paise to close at a fresh record low of 92.45 (provisional) against the US dollar on Friday.
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