Sensex Plummets 813 Points Amid Rising Crude Oil Prices
MUMBAI: Brent crude prices surged past $100 per barrel for the first time since July, driven by escalating geopolitical tensions in the Persian Gulf. This spike in oil prices contributed to the weakening of the Indian rupee, which fell below the 95/$ mark, settling at 95.1 at the close of trading. The developments also impacted Dalal Street, where the Sensex dropped below the 75,000 mark for the first time in nearly three months.
Foreign funds were significant sellers, leading the benchmark index to close 813 points lower at 74,764 points. HDFC Bank and Infosys were the largest contributors to the day’s losses. The Nifty index on the NSE fell by 204 points, or 0.9%, ending at 23,432 points. Over the past month, the Sensex has declined by nearly 3,800 points, or 4.8%, while the Nifty has dropped 1,152 points, or 4.7%.
Foreign portfolio investors (FPIs) have turned aggressive sellers in September, net selling stocks worth approximately Rs 12,400 crore in India, according to data from NSDL and BSE. This shift follows two months of net inflows. The rally in oil prices was also supported by a revival in Chinese demand for crude. Additionally, U.S. bond yields have risen, with the yield on 10-year Treasury bonds surpassing 4.8%, raising concerns among investors about potential increases approaching the 5% mark.
The upcoming U.S. Federal Reserve policy-setting meeting on September 16 is critical for market participants. Any indication of a rate hike could have global repercussions. Vinod Nair of Geojit Investments noted that markets are factoring in a prolonged conflict in West Asia, which is likely to keep crude oil prices elevated. He added that persistent geopolitical uncertainty complicates the ability of major central banks to balance growth and inflation.
On the sectoral front, software services stocks led the decline, with the Nifty IT index falling around 3%. Ajit Mishra of Religare Broking attributed this drop to rising U.S. bond yields, concerns over the Federal Reserve’s rate outlook, and structural worries surrounding AI-driven disruption. Other sectors, including realty, financials, and FMCG, also experienced declines, while select defense, metal, and energy-related stocks showed relative resilience.
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