MUMBAI: With Brent crude hovering above $103 per barrel and the rupee weakening past the 94-per-dollar mark, the BSE Sensex plunged 852 points (1.1%) on Thursday to close at 77,664 points. Foreign funds were aggressive sellers, with net outflows reaching Rs 3,255 crore, their largest single-session net sell-off in two weeks, according to BSE and NSDL data.
Global tensions weigh on markets
The uncertain nature of the second round of peace talks between the United States and Iran took its toll on global markets. Continuing naval blockades in and around the Persian Gulf, along with Iran’s seizure of two ships, kept risk sentiment fragile, market players said.
Due to the global risk-off sentiment, the Sensex opened more than 500 points lower. It regained some ground, briefly crossing the 78,100 mark, but a late sell-off dragged it to an intra-day low of 77,574 points. The index closed just a tad off that low. On the NSE, the Nifty followed a similar path, closing at 24,173 points, down 205 points.
Investors cut exposure to key sectors
According to Ankur Punj, Managing Director and Business Head of Equirus Wealth, domestic markets fell sharply as weak global cues prompted local investors to reduce their exposure to banking, IT, auto, and realty stocks. “There is no clarity on peace talks between the US and Iran, which has led to a renewed uptick in global crude prices. With the rupee on the boil, breaching the 94-per-dollar mark, and continuing foreign fund outflows from domestic equities, there will be a lot of pessimism in the near term,” he said.
This marked the fourth consecutive session of rupee weakness against the dollar. It was the first time this month that the rupee closed below the 94 mark.
Investors lose over Rs 3 lakh crore
Due to the sell-off, investors were left poorer by a little over Rs 3 lakh crore, with BSE’s market capitalisation now at Rs 466.4 lakh crore, official data showed. The day’s slide in the Sensex was driven by sharp selling in HDFC Bank, ICICI Bank, and Reliance Industries. On the other hand, some buying in stocks like L&T and Bharti Airtel cushioned the fall, but only marginally, as per BSE data.
Rupee down 30 paise, closes at 94.1 per dollar
The rupee breached the 94 mark to close at 94.1 on Thursday, down about 30 paise from its previous close of 93.8, after touching an intra-day low of 94.39 per US dollar. The currency has now fallen for four consecutive sessions and is down over 1% so far this week. The weakness has been driven by a roughly 15% surge in crude prices, with oil trading above $100 per barrel.
