Indian shares fell sharply in the closing hours of trade on Tuesday as investors feared a further rise in crude prices following an attack on Saudi Arabian crude oil facilities.
The broader NSE Nifty closed down 1.69% at 10,817.6, while the benchmark BSE Sensex dropped 1.73% to a near one-month closing low of 36,481.09. The rupee slipped further, and was weaker by 0.4% at 71.88 against the dollar by 1027 GMT.
Oil prices slipped on Tuesday, but investors were wary due to the threat of a military response to the attacks. If crude prices remain at elevated levels, emerging markets such as India — the world’s third-biggest importer of oil — are likely to be under pressure.
“Investors are panicking due to fears that crude may rise further,” said Yogesh Nagaonkar, founder and chief executive of Rowan Capital Advisors in Mumbai.
“The underlying tone of the market is already bearish due to slowdown worries and lack of action from the part of the government to counter this, and the crude surge is worsening the situation.”
Two-wheeler maker Hero MotoCorp Ltd suffered its worst session in nearly 14 months. The stock fell 6.2%, and was the top loser on both indexes, while Tata Motors Ltd declined 5.1%.
Meanwhile, private-sector lender Axis Bank Ltd fell to its lowest closing level since Jan. 7.