Street bleeds red as panic selling returns | Markets drop over 2% as risk-off takes hold

Mumbai: Equity benchmark indices Sensex and Nifty tumbled over 2 per cent on Friday after a two-day rally, in tandem with a global selloff, as investor sentiment weakened due to uncertainties over geopolitical tensions.

Crude oil prices staying above the USD 100 per barrel mark, the rupee’s fall to record lows, and unabated foreign fund outflows also added to the gloom. The 30-share BSE Sensex tanked 1,690.23 points, or 2.25 per cent, to settle at 73,583.22.

During the day, it plunged 1,739.04 points, or 2.31 per cent, to 73,534.41. A total of 3,544 stocks declined, while 822 advanced and 135 remained unchanged on the BSE. The 50-share NSE Nifty dropped 486.85 points, or 2.09 per cent, to end at 22,819.60. In a holiday-shortened week, the BSE benchmark lost 949.74 points or 1.27 per cent, and the Nifty tanked 294.9 points or 1.27 per cent.

“Investor sentiment remained fragile due to a lack of clarity surrounding geopolitical tensions between the US and Iran, which once again pushed crude oil prices above the USD 100 mark. In addition, persistent FII outflows and sharp weakness in the rupee further weighed on risk appetite,” Ajit Mishra - SVP, Research, Religare Broking Ltd, said.

From the 30-Sensex firms, Reliance Industries dropped the most by 4.55 per cent, followed by InterGlobe Aviation, Bajaj Finance, State Bank of India, Eternal and HDFC Bank. In contrast, Tata Consultancy Services, Bharti Airtel and Power Grid were the gainers. The BSE MidCap Select index dropped 2.12 per cent, and the SmallCap Select index declined 1.77 per cent.

All sectoral indices ended lower. PSU Bank tumbled 3.88 per cent, realty (3.10 per cent), services (2.86 per cent), auto (2.79 per cent), Bankex (2.70 per cent), financial services (2.69 per cent), consumer discretionary (2.52 per cent), and consumer durables (2.50 per cent).

“Profit booking set in after the recent two-session rally as the rupee fell to an all-time low amid sustained FII selling, while escalating tensions in the Middle East heightened caution among investors ahead of the weekend,” Vinod Nair, Head of Research, Geojit Investments Limited, said. Stock markets were closed on Thursday on account of Ram Navami. Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,805.37 crore on Wednesday, according to exchange data.

Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 5,429.78 crore. “Indian markets witnessed a sharp and uneasy session, with heavyweight energy stocks leading the decline amid a complex mix of policy changes, rising crude prices, and persistent geopolitical uncertainty.

“Adding to the pressure, the Indian rupee weakened further to record lows against the US dollar, underscoring the macro stress building beneath the surface,” Hariprasad K, Research Analyst and Founder, Livelong Wealth, said.