Mumbai: Indian stock markets saw a massive fall after three days of gains. The BSE Sensex dropped 2,496 points, or 3.26%, to close at 74,207. The NSE Nifty fell 775 points to end at 23,002. During the day, markets fell even more sharply.
This crash wiped out over ₹12 lakh crore of investor wealth, and total market value of listed companies dropped to ₹427 lakh crore.
Oil Prices Surge Creates Panic
The biggest reason for the fall was a sharp rise in oil prices. Global benchmark Brent crude jumped around 10 percent and crossed USD 116 per barrel.
This came after reports of attacks on energy facilities in Qatar and shutdowns in the UAE. Higher oil prices increase costs for India and hurt the economy.
US Inflation and Fed Outlook
The Federal Reserve kept interest rates unchanged due to high inflation. It also warned that inflation and unemployment could rise, and rate cuts may be limited. Rising oil prices could further increase inflation globally.
HDFC Bank Dragged Markets
Shares of HDFC Bank fell sharply, dropping up to 9%. This came after chairman Atanu Chakraborty resigned citing ethical concerns.
The bank’s weight in the index made the fall more severe.
Weak Global Markets
Global markets also remained weak. The US markets fell sharply, with S&P 500, Nasdaq, and Dow Jones all closing lower. Asian markets like Nikkei and Kospi also declined, adding pressure on Indian equities.
Rising Bond Yields and FII Selling
US bond yields moved higher, making equities less attractive. At the same time, Foreign Institutional Investors continued selling, offloading ₹2,714 crore worth of shares. Continuous selling has hurt market sentiment.
Expiry Day Volatility and Profit Booking
Thursday being weekly expiry day added to volatility as traders adjusted positions. Also, after three days of rally, investors booked profits, which increased selling pressure.
Rupee Weakness Adds Concern
The Indian rupee fell to a record low of 92.63 against the US dollar. A weak rupee increases import costs, especially for oil, and adds pressure on the economy.
