Mumbai, March 2 The benchmark stock market indices, Sensex and Nifty, plunged by over 1 per cent on Monday as investor sentiment was severely affected following a sharp rise in crude oil prices amid escalating tensions in the Middle East.
Weak trends in global markets and heavy outflows of foreign funds also dampened sentiment.
The 30-share BSE Sensex fell by 2,743.46 points or 3.37 per cent to 78,543.73 in the early trading session. It later closed at 80,238.85, down by 1,048.34 points or 1.29 per cent.
The 50-share NSE Nifty tumbled by 575.15 points or 2.28 per cent to 24,603.50 during the trading day. The benchmark subsequently closed at 24,865.70, down by 312.95 points or 1.24 per cent.
Among the Sensex stocks, InterGlobe Aviation, Larsen & Toubro, Adani Ports, Maruti, Asian Paints, and Bajaj Finserv were among the biggest losers.
Bharat Electronics, Sun Pharma, and ITC were the only gainers.
Brent crude, the global benchmark for oil, rose by 8.34 per cent to USD 78.95 per barrel.
Iran's Supreme Leader Ayatollah Ali Khamenei was killed in a coordinated US-Israeli airstrike on Tehran early Saturday, with Iranian state media confirming his death on Sunday.
Iran began firing missiles at Israel and Arab countries in the region in retaliation for the killing of its Supreme Leader.
In Asian markets, Japan's Nikkei 225 fell by over 1 per cent, and Hong Kong's Hang Seng index tumbled by more than 2 per cent, while Shanghai's SSE Composite index ended in positive territory. Equity markets were closed in South Korea due to a holiday.
Markets in Europe were trading sharply lower.
The US market closed lower on Friday.
"Rising geopolitical tensions in the Middle East have unsettled global markets, with concerns over a possible extension of the situation given the killing of Iran's Supreme Leader," said Vinod Nair, Head of Research, Geojit Investments Ltd.
"Rising crude oil prices and a weakening INR reflect concerns over potential disruptions to oil supply, which could increase inflationary pressures in India and impact fiscal positions and margins for sectors dependent on energy and chemicals," he added.
The India VIX has edged higher, signaling increased uncertainty and risk aversion among market participants, he added.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 7,536.36 crore on Friday, according to exchange data. Domestic Institutional Investors (DIIs) bought stocks worth Rs 12,292.81 crore.
On Friday, the Sensex fell by 961.42 points or 1.17 per cent to settle at 81,287.19. The Nifty tumbled by 317.90 points or 1.25 per cent to end at 25,178.65.
Equity markets would remain closed on Tuesday for Holi.
