Sensex plunged more than 1,100 points on Monday, wiping out roughly ₹6 lakh crore in investor wealth as surging crude prices and a fresh US-Iran diplomatic setback triggered heavy selling across Indian equities.
BY PC BUreau
MUMBAI, September 28: Indian equities came under heavy selling pressure on Monday, with the Sensex plunging more than 1,100 points and investors losing roughly ₹6 lakh crore in market value as a surge in crude prices and a fresh setback in US-Iran diplomacy intensified risk aversion.
The sell-off extended an already prolonged losing streak. Both the Sensex and Nifty have now declined for seven consecutive weeks, with the benchmarks losing nearly 6% over that period, according to Reuters.
The Sensex opened about 500 points lower and the Nifty slipped below the 23,000 mark. Selling accelerated through the session. By around 2:44 pm, the Sensex was down 1,148 points, or 1.55%, at 72,747, while the Nifty had fallen 361 points, or 1.56%, to 22,779. The Nifty touched an intraday low of 22,762.
The decline was broad-based. Banks, financial services, energy, automobiles, infrastructure and consumer stocks all came under pressure, while all 30 Sensex constituents were trading in negative territory at one point. Mid- and small-cap stocks also weakened, leaving few pockets of resilience.
Oil shock rattles markets
The immediate trigger was another jump in crude prices after US President Donald Trump rejected an Iranian proposal aimed at ending the conflict and reopening the Strait of Hormuz.
Brent crude rose more than 2% to around $106.7 a barrel in early trading, while US West Texas Intermediate crude also gained. Economic Times put Brent at around $106 and WTI at $93.40.
The diplomatic setback revived concerns over the security of oil shipments through the Strait of Hormuz, a critical global energy route. Iran has maintained that diplomacy is the way forward, while Trump has said further talks could take place this week.
For India, the oil shock carries direct economic consequences. As one of the world’s largest crude importers, India is vulnerable to a sustained rise in energy prices through a higher import bill, pressure on inflation and the rupee, and a squeeze on corporate margins.
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Foreign selling adds to pressure
Rising crude was not the only source of pressure. Foreign portfolio outflows and elevated global bond yields have also weighed on Indian equities.
Foreign investors had sold equities worth about ₹3,696 crore on Friday, according to Moneycontrol, adding to concerns that overseas selling could continue if geopolitical risks and US yields remain elevated.
Financial stocks were among the biggest casualties, with banks and other rate-sensitive sectors facing selling pressure. Reuters reported that the Nifty financials and banking indexes were down about 1.6% in morning trade.
The rupee also remained under pressure as higher oil prices strengthened demand for dollars. The combination of expensive crude, a weaker currency, foreign outflows and high global yields has created a difficult backdrop for Indian equities.
Investors watch Hormuz and Washington-Tehran
Markets are now closely watching whether Washington and Tehran can revive negotiations and whether oil shipments through the Strait of Hormuz return to more normal levels.
There is also growing sensitivity to the inflationary consequences of sustained high crude prices. Economic Times reported that oil flows through Hormuz had recovered in September, but geopolitical risks remain high and the outlook for supply is uncertain.
Monday’s sell-off therefore reflects more than a single day’s geopolitical shock. It comes after seven straight weeks of losses and leaves Indian benchmarks near six-month lows, with investors facing a combination of elevated oil prices, foreign capital outflows, high global yields and continuing uncertainty over the West Asia conflict.
