Business & Finance

Sensex Sheds 555 Points as US-Iran Tensions Rattle Markets, Rupee Nears 95 Mark

By TNN

Mumbai's stock markets extended their losing streak on Tuesday as escalating tensions between the United States and Iran in the Persian Gulf pushed crude oil prices higher and weakened the rupee, which is now threatening to breach the 95-to-the-dollar level. The BSE Sensex fell 555 points to close at 75,577, while the NSE Nifty dropped 144 points to end at 23,635, as foreign institutional investors continued offloading Indian equities.

Over the past month, the Sensex has lost nearly 3,000 points, a decline of 3.8 percent, as renewed conflict in West Asia drove up oil prices. The Nifty fell by 949 points, or 3.9 percent, during the same period.

Data from the National Securities Depository Limited (NSDL) and BSE showed that since August 10, foreign investors have net purchased Indian stocks worth only Rs 2,953 crore. However, in September alone, foreign funds have net sold shares worth approximately Rs 12,700 crore, reversing gains seen over the previous two months.

The rupee remains under pressure despite a record $136 billion inflow into India through the Reserve Bank of India's special dollar deposit scheme for non-resident Indians (NRIs).

Ankur Punj, Managing Director at Equirus Wealth, said that renewed hostilities between the US and Iran have prompted investors to adopt a cautious approach toward equity investments. He noted that domestic markets mirrored weak global trends on Tuesday, with selling pressure evident across banking, IT, oil and gas, and realty stocks. He added that the rise in crude oil prices due to escalating tensions in West Asia, combined with the rupee's depreciation against the dollar, weighed on overall market sentiment.

Tuesday's decline wiped out approximately Rs 35,000 crore in investor wealth, bringing BSE's total market capitalization down to Rs 486.2 lakh crore, according to official figures.

Among Sensex constituents, ICICI Bank, HDFC Bank, and Reliance Industries were the biggest contributors to the day's losses. Meanwhile, gains in Bharat Electronics Limited (BEL), Hindustan Unilever, and Adani Ports helped limit the overall decline.

In currency markets, the rupee weakened for the first time in three sessions, closing at 94.83 against the dollar, a fall of 34 paise. Dilip Parmar of HDFC Securities attributed the rupee's decline to persistent risk-averse sentiment and rising oil prices, noting that aggressive dollar purchases outpaced available liquidity.