Sensex Falls Over 500 Points; Oil Spike, FII Outflows Hit Markets in Closing Trade

The Indian benchmark indices concluded Thursday's session with significant losses following a volatile day of trading dominated by global pressures.

The BSE Sensex shed 582.86 points, or 0.75 per cent, to settle at 76,913.50. Simultaneously, the NSE Nifty 50 slipped 180.10 points, or 0.74 per cent, to end the day at 23,997.55.

At the time of filing this report, Brent Crude Oil financial futures dropped 1.22 per cent to trade at $116.59.

In Asia, the Jakarta Composite and Hang Seng saw notable drops of 2.08 per cent and 1.39 per cent respectively, while the Nikkei 225 fell by 1.29 per cent (-762.46 points), reflecting a cautious sentiment in the region, despite minor gains in the Straits Times (+1.06%) and Shanghai Composite (+0.11%).

US Markets are experiencing mixed results but lean toward the negative. Dow Jones Futures are down 0.18 per cent and the S&P 500 has dipped slightly by 0.04 per cent.

The Nasdaq provides a small bright spot with a marginal increase of 0.04 per cent.

Market participants said the sharp rise in crude prices and lack of clarity on the geopolitical situation have led to heightened volatility and risk aversion.

What signals are GIFT Nifty and global markets giving for Sensex and Nifty?

Ajay Bagga, Banking and market expert, told ANI that domestic markets are facing significant pressure, with early indications such as GIFT Nifty pointing to a gap-down opening of over 140 points.

He noted that as a major oil importer, India is witnessing pressure on its currency and bond markets, with the rupee weakening to near Rs 95 per US dollar and bond yields rising.

"The market is currently in a 'wait-and-watch' mode regarding whether the U.S. will move beyond a blockade to direct military action, which remains the primary tail-risk for the coming weeks. With a long weekend coming up expect sharp moves and paring of positions in Indian markets," he added.

The geopolitical situation has intensified as US President Donald Trump stated that the naval blockade of the Strait of Hormuz will continue until Iran agrees to a new nuclear and security deal.

The US has rejected Iran's proposal to reopen the Strait before negotiations, increasing fears of prolonged supply disruptions.

In the commodities market, Brent crude futures surged to as high as $121 per barrel during early trade, a level not seen in last four years.

July futures opened at around $111 per barrel. Meanwhile, WTI crude was also trading significantly higher, near $108 per barrel.

(With inputs from ANI)