Mumbai

Indian equity benchmarks ended sharply lower on Monday as investors reacted to weak global cues, escalating geopolitical tensions in West Asia and a steep rise in crude oil prices.

The decline marked the second consecutive session of losses for domestic markets.

The BSE Sensex dropped 719.08 points, or 0.97 per cent, to close at 73,524.26. During the session, the index had fallen as much as 924.40 points, or 1.24 per cent, to touch an intraday low of 73,318.94.

Similarly, the NSE Nifty50 settled 243.70 points lower, down 1.04 per cent, at 23,123. The benchmark index had slipped 296.55 points, or 1.26 per cent, during the day to hit 23,070.15.

Among the biggest losers on the Sensex were Eternal, Mahindra & Mahindra, Trent, InterGlobe Aviation, Reliance Industries and Tata Consultancy Services, which witnessed heavy selling pressure.

On the other hand, Power Grid Corporation, Tech Mahindra, Bharat Electronics and Bharti Airtel managed to buck the broader trend and ended in positive territory.

Investor sentiment remained under pressure as Brent crude oil prices surged sharply. The global benchmark rose 4.10 per cent to USD 96.91 per barrel, fuelling concerns over inflation and the impact of higher energy costs on global growth.

Asian markets closed deep in the red, reflecting widespread risk aversion. South Korea's Kospi suffered the steepest fall, plunging 8.29 per cent, while Japan's Nikkei 225 declined 3.85 per cent. China's Shanghai Composite and Hong Kong's Hang Seng also finished significantly lower.

European equities were trading with losses as investors continued to assess the implications of heightened geopolitical uncertainty.

Wall Street had already set a negative tone on Friday, with major US indices witnessing sharp declines. The technology-heavy Nasdaq Composite fell 4.18 per cent, while the S&P 500 lost 2.64 per cent and the Dow Jones Industrial Average dropped 1.35 per cent.

Market analysts attributed the sell-off to a combination of geopolitical risks and concerns over stretched valuations in technology stocks.

Vinod Nair, Head of Research at Geojit Investments Limited, said global sentiment had deteriorated due to the renewed tensions in West Asia, which pushed crude oil prices closer to the USD 100-per-barrel mark.

He also noted that technology stocks worldwide had come under pressure as investors began questioning whether the recent artificial intelligence-driven rally could sustain its momentum.

Nair added that semiconductor-focused indices had witnessed selling, suggesting the possibility of valuation corrections and profit-booking, although it would be premature to interpret this as a broader reversal of the technology trend.

Foreign institutional investors (FIIs) remained net sellers in the Indian market, offloading equities worth Rs 8,776.25 crore on Friday, according to exchange data.

Ponmudi R, Chief Executive Officer of Enrich Money, said investor caution intensified after Israel and Iran reportedly exchanged missile strikes despite earlier ceasefire efforts, raising fears of an extended regional conflict and potential disruptions to global energy supplies.

He added that growing signs of fatigue in the global technology and AI rally further contributed to the subdued market mood.

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In the previous session on Friday, the Sensex had declined by 116.67 points to close at 74,243.34, while the Nifty had slipped 49.85 points to settle at 23,366.70.