Dalal Street slumps on oil spike, bond rout & Irda jolt

Mumbai: Indian equity indices came under heavy selling pressure on Thursday, with rising US bond yields, elevated crude oil prices, weakness in the rupee and a sell-off in financials weighing on investor sentiment.

The US 10-year Treasury yield moved above 5.10%, while Brent crude remained above $102 a barrel, raising concerns over global liquidity, inflation and India's import bill.

The Nifty 50 fell 383.70 points, or 1.64%, to close at 23,063.10, while the Sensex lost 1,247.71 points, or 1.67%, to end at 73,580.54.


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"Rising US bond yields and elevated crude prices are weighing on overall risk appetite, while the Irda proposal on insurance commissions has added a fresh overhang on the financial-services basket, particularly insurance-related stocks," said Ajit Mishra, senior vice-president of research, Religare Broking.

Eye on Global Cues

An Insurance Regulatory and Development Authority of India (Irda) consultation paper has proposed tighter limits on insurance commissions distribution expenses and loan-linked insurance practices.

The potential pressure on bancassurance fees triggered heavy selling across insurers, distribution platforms and exposed banks and nonbanking finance companies (NBFCs), pushing the Bank Nifty below 56,000.

Mishra said volatility is likely to remain elevated in the near term, with global yields, crude prices and geopolitical developments remaining key market drivers.

Selling was broad-based, particularly across financials and other rate-sensitive sectors, while the Nifty failed to sustain its recovery from the day's low. Elevated crude prices, higher US yields, rupee weakness and geopolitical uncertainty kept investors cautious, with only three Nifty stocks advancing against 47 declines.

Broader markets also ended weaked with the Nifty midcap index falling 2% and the smallcap index down 1.5%. Bajaj Finance, HDFC Life, Bajaj Finserv, Axis Bank and InterGlobe Aviation were among the biggest Nifty losers. Cipla and NTPC were among the few gainers.

All sectoral indices ended lower, led by Nifty Private Bank, which fell 2.2%, followed by Nifty Metal (1.9%) and Nifty Bank (1.7%). Nifty Infra and Nifty Auto declined 1.5% each, followed by Nifty Oil & Gas (1.3%), Nifty PSU Bank (1.3%), Nifty Energy (1.2%) and Nifty FMCG (1%).