 "Stock market today: Sensex plunges over 2,300 points, Nifty slips below 23,800 as banking and infra stocks drag markets. Representational image/Pixabay")
Indian equity markets plunged sharply in early trade on Monday as a global risk-off sentiment triggered by surging oil prices and escalating conflict in West Asia rattled investors.
The BSE Sensex fell 2,344.63 points, or 2.97 per cent, to 76,574.27 as of 9:21 am, after opening at 77,056.75. The benchmark touched an intraday low of 76,573.01, extending the early sell-off across sectors.
The Nifty 50 also slid sharply, dropping 703.15 points, or 2.88 per cent, to 23,747.30, slipping below the 23,800 mark. Market breadth remained extremely weak with 48 stocks declining and only two advancing on the index.
Oil shock from West Asia war rattles markets
The sharp fall in Indian equities came as global markets reacted to a dramatic surge in oil prices following the widening war involving the United States, Israel and Iran in West Asia.
Global crude prices jumped nearly 20 per cent on Monday, hitting their highest levels since July 2022, after major producers in the region began cutting output amid fears of prolonged disruptions to energy supplies.
The global benchmark Brent Crude rose as much as 19.8 per cent to $111.04 per barrel, while the US benchmark West Texas Intermediate surged over 22 per cent to $111.24 earlier in the session.
The spike came after Iraq and Kuwait began cutting oil production as the conflict disrupted shipments through the strategically vital Strait of Hormuz, one of the world’s most important energy shipping routes.
Overall, crude oil prices have risen nearly 30 per cent, with Brent crude up about 26 per cent, heating oil up 22 per cent, and gasoline prices up 14 per cent, raising fears of a fresh inflation shock globally.
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The oil price surge triggered a sharp sell-off across global equities. Japan’s Nikkei 225 plunged around 7 per cent, while South Korea’s KOSPI dropped 8 per cent.
Australia’s S&P/ASX 200 fell more than 4 per cent, while Indonesia’s Jakarta Composite Index slipped 4 per cent. Singapore’s Straits Times Index declined over 3 per cent.
US stock futures also pointed to steep declines, signalling a possible sell-off when trading begins on S&P 500 and Dow Jones Industrial Average later in the day.
Banking, infrastructure stocks drag Dalal Street
On Dalal Street, banking and financial stocks led the losses. Shares of State Bank of India dropped 4.58 per cent, while ICICI Bank fell 3.77 per cent and Axis Bank declined 3.49 per cent.
Private lender HDFC Bank also slipped over 3 per cent, while Bajaj Finance and Bajaj Finserv fell more than 3 per cent each.
Infrastructure major Larsen & Toubro dropped nearly 5 per cent, while steelmaker Tata Steel declined more than 5 per cent.
Aviation and auto stocks under pressure
Aviation stocks saw some of the steepest losses as investors reacted to the spike in fuel costs. Shares of airline operator InterGlobe Aviation, which runs IndiGo, plunged more than 6.6 per cent in early trade.
Auto stocks also came under pressure, with Maruti Suzuki dropping over 4.5 per cent and Mahindra & Mahindra falling more than 3 per cent.
Few gainers in weak market
Only a handful of stocks managed to stay positive. Energy companies such as Oil and Natural Gas Corporation and Coal India were among the rare gainers, benefiting from the surge in global oil prices.
Analysts said markets are likely to remain volatile as the war in West Asia threatens to disrupt global energy supplies and trigger a fresh wave of inflation, which could weigh on economic growth and investor sentiment worldwide.