Equity benchmarks received a severe drubbing on Monday, with the Sensex tumbling 1,491 points amid extremely weak global markets and elevated oil prices triggered by the Russia-Ukraine conflict.
Extending its downtrend for the fourth straight session, the 30-share BSE Sensex opened on a weak note and slumped 1,966.71 points or 3.61 per cent to 52,367.10 during the day. It finally managed to recover some of the lost ground and settled at 52,842.75, a decline of 1,491.06 points or 2.74 per cent.
Similarly, the broader NSE Nifty tanked 382.20 points or 2.35 per cent to close at 15,863.15.
"The southward journey is continued in the Indian equity market on the back of intense geopolitical tension where boiling crude oil prices is spooking the investors' sentiment in India. Brent crude is trading near USD 130 per barrel which is a multi-year high level.
"Higher crude oil prices are leading to weakness in the rupee whereas relentless selling by FIIs is also causing pressure in our market," according to Parth Nyati, founder of Tradingo.
From the 30-share pack, Indusind Bank, Axis Bank, Maruti Suzuki, Bajaj Finance, Bajaj Finserv, UltraTech Cement and Mahindra & Mahindra were the biggest drags, tumbling up to 7.63 per cent.
In contrast, Bharti Airtel, HCL Technologies, Tata Steel and Infosys settled in the green.
Among BSE sectoral indices, realty, bank, finance and auto finished with deep cuts.
Bourses in Hong Kong, Shanghai and Tokyo settled significantly lower.
Rupee Plummets 84 Paise To All-Time Low Of 77.01/USD Amid Ukraine Crisis
The rupee tanked 84 paise to close at its lifetime low of 77.01 (provisional) against the US dollar on Monday as intensifying geopolitical risks due to the Russia-Ukraine conflict pushed investors to safe haven assets.
Forex traders said escalating tensions between Russia and Ukraine kept crude oil prices at an elevated level and heightened worries about domestic inflation and wider trade deficits.
Sustained foreign fund outflows and a lacklustre trend in domestic equities also weighed on investor sentiment.
At the interbank foreign exchange market, the rupee opened at 76.85 against the American currency but lost ground and settled for the day at a record low of 77.01, down 84 paise from the previous close.
On Friday, the rupee fell by 23 paise to close at 76.17 -- its lowest closing level since December 15, 2021.
"The Indian rupee has plummeted to a lifetime low against the US dollar as the deepening Russia-Ukraine conflict has sapped risk appetite in the market while prompting safe-haven flows into the US dollar," said Sugandha Sachdeva, Vice President - Commodity and Currency Research, Religare Broking Ltd.
Besides, the parabolic rise in crude oil prices towards multi-year highs and spiralling commodity prices are fuelling inflationary risks, which is a key headwind for the rupee-dollar exchange rate, Sachdeva added.
According to Sachdeva, the overall trend for the Indian rupee is skewed towards the downside and "a convincing close below the 77 mark would pave the way for further downside towards 77.50 mark in near term, while we envisage the local currency to test the 79 mark from a medium-term perspective."
Meanwhile, the dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.46 per cent higher at 99.09.
Global oil benchmark Brent crude futures jumped 6.55 per cent to USD 125.85 per barrel.
Foreign institutional investors continued their selling spree in Indian markets as they offloaded shares worth Rs 7,631.02 crore on a net basis on Friday, according to exchange data.
"This week's focus will be on the Russia-Ukraine conflict and its impact on oil prices. On the home front, investors will be watching the outcome of the state elections in five states on March 10," said Mohit Nigam, Head - PMS, Hem Securities.