Mumbai, March 30 – The benchmark indices Sensex and Nifty experienced a sharp decline in early trading on Monday as the ongoing conflict in West Asia continued to rattle markets globally, driving up crude oil prices.
Further, the continued outflow of foreign funds also contributed to the weakness in domestic equities.
The 30-share BSE Sensex fell by 1,191.24 points, closing at 72,391.98. The 50-share NSE Nifty declined by 349.45 points, ending at 22,470.15.
Among the 30 companies in the Sensex, Axis Bank, Kotak Mahindra Bank, Bajaj Finserv, Bajaj Finance, Bharti Airtel, and ICICI Bank were among the biggest losers.
Bharat Electronics, Reliance Industries, Power Grid, Tata Consultancy Services, and Hindustan Unilever were the gainers.
Brent crude, the global benchmark for oil, rose by 2.32%, closing at $115.3 per barrel.
In Asian markets, the benchmark Kospi and Nikkei 225 index in South Korea and Japan, as well as the Hang Seng index in Hong Kong, all experienced significant declines, while the Shanghai SSE Composite index traded in positive territory.
The US market closed significantly lower on Friday. The Nasdaq Composite index fell by 2.15%, while the Dow Jones Industrial Average lost 1.73%, and the S&P 500 declined by 1.67%.
According to exchange data, Foreign Institutional Investors (FIIs) sold equities worth Rs 4,367.30 crore on Friday. Domestic Institutional Investors (DIIs), however, bought stocks worth Rs 3,566.15 crore.
Foreign investors have withdrawn approximately $12.3 billion (Rs 1.14 lakh crore) from domestic equities in March, making it the worst monthly outflow, due to escalating tensions in West Asia, a weakening rupee, and concerns about the impact of high crude oil prices on India's growth.
"The pressure is largely external, as escalating geopolitical tensions and rising crude oil prices continue to dominate investor sentiment. Asian markets have opened with significant declines, with South Korea's Kospi and Japan's Nikkei falling sharply.
"The broad-based weakness comes as the conflict in the Middle East enters its fifth week, with further escalation following reports that Yemen's Houthis launched missile strikes on Israel. This has widened the scope of the conflict and heightened fears of prolonged instability in the region," said Hariprasad K, Research Analyst and Founder, Livelong Wealth.
On Friday, the Sensex fell by 1,690.23 points or 2.25%, closing at 73,583.22. The Nifty dropped by 486.85 points or 2.09%, ending at 22,819.60.