Mumbai, March 27 – The Sensex and Nifty benchmark indices plunged by over 2% on Friday after a two-day rally, in line with a global sell-off, as investor sentiment weakened due to uncertainties surrounding geopolitical tensions.
The sustained prices of crude oil above USD 100 per barrel, the rupee's fall to record lows, and continued outflows of foreign funds also contributed to the negative sentiment.
The 30-share BSE Sensex fell by 1,690.23 points, or 2.25%, to close at 73,583.22. During the day, it dropped by 1,739.04 points, or 2.31%, 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 by 486.85 points, or 2.09%, to end at 22,819.60.
In a week shortened by a holiday, the BSE benchmark lost 949.74 points, or 1.27%, and the Nifty fell by 294.9 points, or 1.27%.
"Investor sentiment remained fragile due to a lack of clarity regarding geopolitical tensions between the US and Iran, which once again pushed crude oil prices above USD 100. In addition, persistent outflows of foreign investors and a sharp decline in the rupee further dampened risk appetite," said Ajit Mishra, SVP, Research, Religare Broking Ltd.
From the 30 companies in the Sensex, Reliance Industries saw the largest decline, at 4.55%, followed by InterGlobe Aviation, Bajaj Finance, State Bank of India, Eternal, and HDFC Bank.
In contrast, Tata Consultancy Services, Bharti Airtel, and Power Grid saw gains.
The BSE MidCap Select index declined by 2.12%, and the SmallCap Select index declined by 1.77%.
All sectoral indices ended in the red. PSU Bank declined by 3.88%, realty (3.10%), services (2.86%), auto (2.79%), Bankex (2.70%), financial services (2.69%), consumer discretionary (2.52%), and consumer durables (2.50%).
Brent crude, the global oil benchmark, jumped by 1.72% to USD 109.9 per barrel.
The rupee fell by 86 paise to close at another all-time low of 94.82 (provisional) against the US dollar on Friday.
In Asian markets, South Korea's benchmark Kospi and Japan's Nikkei 225 index ended lower, while Shanghai's SSE Composite index and Hong Kong's Hang Seng index settled in positive territory.
European markets were trading in the red.
The US market ended sharply lower on Thursday.
"Profit booking began after the recent two-day rally as the rupee fell to an all-time low amid sustained selling by foreign investors, while escalating tensions in the Middle East heightened caution among investors ahead of the weekend," said Vinod Nair, Head of Research, Geojit Investments Limited.
Stock markets were closed on Thursday due to Ram Navami.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 1,805.37 crore on Wednesday, according to exchange data. Domestic Institutional Investors (DIIs) 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 underlying macroeconomic stress," said Hariprasad K, Research Analyst and Founder, Livelong Wealth.
On Wednesday, the Sensex jumped by 1,205 points or 1.63% to close at 75,273.45. The Nifty surged by 394.05 points or 1.72% to end at 23,306.45.