Mumbai, May 11: On the first trading day of the week, the Indian stock market experienced a substantial sell-off due to negative global signals amid ongoing tensions in West Asia. Major benchmarks, Nifty50 and Sensex, closed down by over 1.5 percent.
At the close, the BSE Sensex, which comprises 30 stocks, fell by 1,312.91 points, or 1.70 percent, ending at 76,015.28. Meanwhile, the NSE Nifty50 dropped by 360.30 points (1.49 percent) to settle at 23,815.85.
During the trading session, the Sensex opened at 76,638.09 but plummeted to a low of 75,957.40, a decline of over 1.5 percent. The Nifty opened at 23,970.10 and fell to a low of 23,799.10, dropping more than 1 percent.
In the broader market, the Nifty Midcap index fell by 1.05 percent, while the Nifty Smallcap index decreased by 1.13 percent.
Sector-wise, the most significant declines were seen in Nifty Consumer Durables, which dropped by 3.73 percent, and Nifty Realty, which fell by 3.05 percent. Additionally, Nifty Media, Nifty PSU Bank, and Nifty Oil and Gas all recorded declines of over 2 percent. Other sectors like Nifty Auto, Nifty Financial Services, Nifty Metal, and Nifty Private Banks also performed poorly.
On a positive note, Tata Consumer’s shares surged over 8 percent, followed by Max Healthcare with a 2.7 percent increase. Other gainers included Coal India, Sun Pharma, HUL, Grasim, ONGC, Adani Ports, and SBI Life. Conversely, Titan, Indigo, SBI, Eternal, Jio Financial Services, Bharti Airtel, and Reliance saw the most significant declines, making them the top losers of the day.
During this period, the total market capitalization of BSE-listed companies fell from ₹473.5 lakh crore to approximately ₹467.5 lakh crore, resulting in a loss of around ₹6 lakh crore for investors.
Meanwhile, Brent crude futures rose by 2.12 percent, trading near $103.4 per barrel.
Market expert Sunil Shah stated in an interview that the stock market’s decline is not solely due to Prime Minister Narendra Modi’s appeal but is primarily driven by ongoing tensions in West Asia and persistently high crude oil prices. He noted that last week, there was optimism that the crisis in the Hormuz Strait would soon resolve, leading to a bullish market atmosphere and a drop in oil prices.
Shah explained that crude oil prices had previously surged to $115-120 per barrel but later fell to around $90. India’s GDP growth, corporate earnings, and various economic forecasts were based on crude oil prices ranging from $65 to $75 per barrel. However, oil prices have remained high for the third consecutive month, and there are no indications that the Hormuz crisis will end soon, resulting in market anxiety and uncertainty.
He emphasized that Modi’s appeal aims to strengthen the economy. India imports about 70 to 75 percent of its energy needs. The government encourages people to use petrol and diesel judiciously and to postpone unnecessary foreign travel and gold purchases temporarily. This approach aims to save dollars, reduce the current account deficit, and alleviate pressure on the rupee.
Shah added that reducing non-essential spending and fuel wastage would benefit both the economy and the corporate sector. He reiterated that the primary concern for the market remains crude oil prices. If oil prices return to the $65-75 per barrel range, it would signal a positive outlook for the Indian market and economy.
Market expert A.P. Shukla also commented that when a significant leader makes a serious appeal, it naturally impacts the market and public sentiment. He noted that Modi has urged people to delay gold purchases for a year, reduce petrol and diesel consumption, and shift towards alternative energy sources.
Shukla explained that India imports large quantities of crude oil and gold, incurring significant dollar expenditures. He highlighted that since the onset of the Russia-Ukraine war, the rupee has weakened against the dollar, and gold prices have surged. India imports approximately 700-800 tons of gold annually, alongside substantial foreign currency expenditures on crude oil.
He acknowledged that while gold is a valuable asset class, most of it remains locked away and is not actively used in the economy. In contrast, circulating that money within the economy could foster growth and job creation.
Shukla concluded by stating that the ongoing conflict in West Asia and the situation in the Hormuz Strait have impacted the global economy. Disruptions in oil production and supply have led to instability in global markets, particularly affecting major consumer countries like China and India.
He further urged that countries should resolve disputes through dialogue and mediation, as war ultimately affects all economies. According to him, peace and stability are the foundation of global economic growth.
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