Stock market bloodbath: Sensex dives 1,045 pts, Nifty tanks to 21-month low
Sharp spike in oil prices, fears of further monetary tightening after yesterday's repo rate hike by RBI trigger bearish run
Benchmark stock index Sensex tanked 1,045 points while the Nifty slid to a 21-month low on Thursday (October 8) 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.
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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 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 rises, FIIs offload stocks
Brent crude, the global oil benchmark, jumped 4.25 per cent to $104.5 per barrel.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 6,121.37 crore on Wednesday, according to exchange data.
The Reserve Bank of India (RBI) raised its benchmark repo rate by 25 basis points to 5.50 per cent on Wednesday, its first hike in nearly four years, while signalling that rate cuts are off the table in the near term and that further hikes could follow amid rising inflation, a weak rupee and high crude oil prices.
The six-member Monetary Policy Committee (MPC) of the RBI voted unanimously to raise the repo rate, and sprang a surprise with a shift in policy stance to "calibrated tightening" from "neutral".
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"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," said Vinod Nair, Head of Research, Geojit Investments.
Moreover, volatile crude oil prices hovering stubbornly above the $100 mark continue to be a hurdle for the national economy, he added.
Indices end lower
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.
"Indian equity benchmarks ended sharply lower on Thursday as risk aversion intensified across the market. Crude oil remained the key source of pressure, with rising energy prices reviving concerns over a more persistent inflationary backdrop just a day after the RBI shifted its policy stance toward calibrated tightening," said Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm.
"Elevated US Treasury yields and continued FII selling added to the pressure, while mixed global cues provided little support to domestic equities," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm," he added.
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hang Seng index ended significantly lower.
European markets were quoting in negative territory. US markets ended lower on Wednesday.
On Wednesday, the Sensex fell 429.11 points, or 0.59 per cent, to settle at 72,638.70. The Nifty declined 173.05 points, or 0.76 per cent, to end at 22,603.05.
With agency inputs