NEW DELHI: Stock markets tumbled on Thursday with benchmark indices Sensex and Nifty tanking over 1.6%—the steepest single-day decline in three months—as geopolitical tensions jacked up Brent crude oil prices and US bond yields hit a 19-year high, triggering an across-the-board selling pressure.
Nifty 50 fell 1.64% to close at 23,063 while the Sensex slipped 1.67% to 73,580 on Thursday.
Global sentiments, too, remained muted as US equities fell sharply amid signs of further monetary tightening. Brent crude oil prices rose 2% to $106/bbl, amid growing uncertainty over US-Iran ties.
The US 10-year Treasury yield surged to around 5.11%, its highest level since 2007. Elevated US bond yields mean more risk-free returns for foreign institutional investors, who tend to divert liquidity away from emerging markets.
Experts say Indian equities are likely to remain weak in the near term as investor sentiment has turned risk-averse amid lingering uncertainties around inflation and economic growth. In the absence of positive triggers, the sentiment will remain cautious, they add.