Sensex Falls Over 2,300 Points, Nifty Slips Below 23,750 Amid Crude Oil Surge

Indian equity markets declined sharply on Monday, with the BSE Sensex falling 2,345.89 points, or 2.97%, to 76,573.01 and the NSE Nifty 50 dropping 708.75 points, or 2.89%, to 23,741.70, according to data from the National Stock Exchange (NSE) and BSE.

The drop sent both benchmark indices to their lowest levels in about 10 months. This was because investors were worried about rising global crude oil prices, weak international market signals, and continued outflows of foreign institutional investors.

There was selling pressure in all sectors, and all 16 major sectoral indices were in the red during the session.

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Broad-Based Selling Across Markets

Along with the benchmark indices, broader markets also saw big drops.

According to NSE data, the Nifty Midcap100 and Nifty Smallcap100 indices both fell by about 3%. This is because a lot of people were selling shares in mid-sized and small companies.

The drop came with a big increase in market volatility. The India VIX index, which shows how much the stock market is expected to move, went up more than 21% to 24.18 during the session.

A rising India VIX suggests a growing uncertainty among investors, a state of affairs often linked to increased market volatility.
Prices of crude oil go up

One of the most important things that changed people's minds about the market was the sharp rise in global crude oil prices.

Brent crude, the world's oil benchmark, jumped about 26% in early trading to about $119 per barrel, its highest level since July 2022, according to Reuters.

The rise came after oil supplies from the Middle East were cut off because of rising geopolitical tensions. Reports said that Iraq and Kuwait started to cut back on oil production. Earlier shipments of liquefied natural gas from Qatar were also affected because of problems with regional exports.

India gets a lot of its crude oil from other countries, so changes in global oil prices can have a big effect on the Indian market.

Weak Global Market Cues

Global equity markets also traded lower, adding to negative sentiment in domestic markets.

According to Reuters, South Korea’s Kospi index declined more than 7%, while Japan’s Nikkei 225 dropped around 6.5%. China’s Shanghai Composite and Hong Kong’s Hang Seng index were also trading lower during the session.

In the United States, major stock indices closed in negative territory on Friday. Wall Street futures were also indicating potential declines ahead of the next trading session.

Currency Movement And Foreign Investor Activity

The Indian rupee weakened against the U.S. dollar during early trading on Monday.

According to foreign exchange market data, the rupee fell 46 paise to 92.28 against the U.S. dollar. The currency had previously touched an all-time intraday low of 92.35 on March 4.

Foreign Institutional Investors (FIIs) also continued to reduce their exposure to Indian equities. According to NSE data, FIIs sold shares worth ₹6,030.38 crore on March 6.

The combination of rising crude oil prices, global market declines, currency movement, and foreign investor outflows contributed to the sharp fall in Indian equity markets during the trading session.