Monday meltdown: Sensex, Nifty tank 3% each; investors lose Rs 13.8 lakh cr in 10 mins

Sensex, Nifty crash: Indian benchmark indices opened with big cuts on Monday amid the rising crude oil prices amid the US-Israel war with Iran, stoking new fears of crude oil supply. India, being the world's third-largest crude importer, India, faces renewed inflation risks as the crude oil prices soared nearly 26 per cent to their highest since July 2022.

BSE benchmark Sensex lost nearly 2,500 points, or 3.16 per cent to hit day's low at 76,424.55 as of 9.30 am, while NSE' Nifty50 barometer nosedived more than 750 points, or 3.08 per cent, to 23,697.80 in the early trade. Broader market indices fell in tandem, losing 3-4 per cent each. Fear Gauge India VIX zoomed nearly 22 per cent to 24.21 on Monday.

Investors took a notional blow of Rs 13.80 lakh crore in the first 10 minutes from their wealth. The total market capitalization of all the BSE listed companies cracked to Rs 436.19 lakh crore from its previous close at Rs 449.99 lakh crore.

"Brent crude has spiked above $115 delivering a big oil shock to economies and markets. Big oil importers like India will be hit hard if the West Asian conflict lingers long and crude price remains high. The market will price-in the economic consequences of this oil shock, said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments.

"Inflation will certainly move up whether the oil price hike is passed on to consumers or not.  The unknown factor now is how long the conflict will last. This uncertainty will also weigh on FIIs who have again turned aggressive sellers in India after the short bout of buying in February. Investors have to be patient," he said.

All the 30 stocks of BSE Sensex were trading in red with Hindalco, State Bank of India, Larsen & Toubro, Tata Steel, Asian Paints and Maruti Suzuki emerging as top laggards, falling 5-8 per cent each. HDFC Bank, ICICI Bank and SBI were the biggest contributors to the crash in the index as traders fear rate hikes from the central bank if inflation persists.

Other Asian stocks fell up to 7 per cent, ‌while ⁠Wall Street and European futures also slid, as the inflationary shock from surging crude prices threatened to harden or push up interest rates worldwide. Iraq and Kuwait have begun cutting oil output, adding to earlier liquefied natural ​gas reductions from Qatar, as the war ​blocks ⁠shipments from the Middle East.

Given the prevailing global uncertainties and heightened market volatility, investors are advised to maintain a disciplined and selective approach, focusing on fundamentally strong stocks during market corrections, said Hitesh Tailor, Research Analyst, Choice Equity Broking Private Limited. "Initiating fresh long positions may be more prudent only after a clear and sustained breakout."

Indian refiners slumped on ​Monday, as ‌the widening U.S.-Israeli war with ​Iran propelled crude prices ​to their highest ⁠in almost four ​years. Indian Oil, Hindustan Petroleum and Bharat Petroleum lost 7-8 per cent at open. Budget airline IndiGo also faced the heat of rising crude oil prices as the stock cracked more than 8 per cent to hit new 52-week lows.