MUMBAI: The Indian stock market witnessed a sharp decline on Monday as West Asia peace talks stalled and fresh tensions emerged between the US and Iran, pushing crude oil prices higher. The Sensex dropped 508 points to close at 74,267, after falling 1,100 points from the day's high. Foreign portfolio investors (FPIs) continued their selling spree, offloading stocks worth over Rs 3,900 crore, pushing total outflows in 2025 beyond Rs 2.5 lakh crore, compared to nearly Rs 1.7 lakh crore in the entire previous year.
Market Breadth and Sectoral Impact
Monday marked the fourth consecutive session of losses for the Sensex, during which the index has lost 2,222 points or almost 3%. The broader market also faced pressure, with BSE market capitalisation declining by about Rs 4.3 lakh crore to Rs 460.7 lakh crore. However, the rupee showed signs of stability, closing 1 paise stronger at 94.99 against the US dollar, though it weakened in late non-deliverable forwards to 95.17.
Crude Oil and Global Cues
Brent crude surged over 5% in late trades to near $96 per barrel, driven by reports of flare-ups in the Persian Gulf. In US markets, the Dow Jones fell about 100 points (0.2%), while the Nasdaq Composite and S&P 500 were flat. The spike in oil prices weighed on sentiment, as India imports most of its crude requirements.
Outlook and Key Monitorables
Siddhartha Khemka of Motilal Oswal Financial Services said the domestic market is likely to remain range-bound with a marginal negative bias in the near term due to persistent FPI selling and global uncertainty. With the January-March earnings season largely over and stronger earnings growth reported, focus will shift to stock-specific opportunities in the midcap space. Key monitorables include the RBI's upcoming policy meeting concluding on June 5, and textile stocks may stay in focus after the government's cotton import duty waiver.
Stock in Focus
Zee Entertainment Enterprises jumped 7% intra-day after announcing it will telecast the upcoming football World Cup in India. Overall, the market remains cautious amid geopolitical risks and foreign fund outflows.
