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Indian stock markets witnessed a sharp fall on Thursday on the back of rising global tensions and a sudden spike in oil prices, as the ongoing conflict involving the US, Iran, and Israel disrupted key energy infrastructure.
The benchmark indices, Nifty and Sensex, ended the session with steep losses as both indices logged their steepest single-day fall in nearly two years.
The Nifty dropped 775.65 points, or 3.26 per cent, to close at 23,002.15, while the Sensex fell 2,496.89 points, or 3.26 per cent, to settle at 74,207.24.
The sell-off came as crude oil prices surged sharply amid fears of supply disruptions.
Brent crude jumped nearly 11 per cent to $119.5 per barrel after reports indicated that Saudi Arabia halted oil loading at the Yanbu port following damage to key refineries.
Drone strikes reportedly hit Samref’s facilities, while several refineries of Aramco caught fire during the escalation in the US-Iran conflict.
Market volatility also spiked significantly during the day. The India VIX surged over 22 per cent during the session − reflecting heightened uncertainty among investors.
It eventually closed nearly 22 per cent higher, indicating that nervousness may continue in the near term.
The broader markets also mirrored the weakness in benchmark indices. Midcap and smallcap stocks saw notable declines, with both indices falling around 3 per cent each.
Sector-wise, the auto sector was the worst hit, followed by financial services and IT stocks, which also saw heavy selling pressure.
The sharp rise in oil prices tends to impact auto companies due to higher fuel costs, while financial and IT stocks often react to global uncertainties.
Analysts said that the overall market mood remained cautious, as investors reacted to geopolitical developments and worried about the potential economic impact of prolonged conflict and rising energy costs.
Meanwhile India’s stock market has become an attractive destination for foreign investors after the recent correction, a senior official of the market regulator said, highlighting fresh opportunities for global players, including those from Russia.
Kamlesh Chandra Varshney, whole-time member of the Securities and Exchange Board of India, said valuations in the Indian equity market now look “quite attractive” following a decline over the past few months.
“The correction, which has been influenced by global volatility and the ongoing West Asia conflict, has opened up a strong investment window for foreign portfolio investors (FPIs),” he noted.
Speaking at a Russia-India Forum event held at the National Stock Exchange of India here, Varshney said there is a “tremendous opportunity” to invest in Indian equities at current levels. Benchmark indices have fallen more than 8 per cent this month, impacting investor sentiment but also improving entry valuations.
Indo-Asian News Service
