Crude shock, bond jitters send Sensex, Nifty into a rout

Tuesday witnessed one of the market's most turbulent sessions in recent months as a trifecta of soaring crude prices, record-high US bond yields, and a weakening rupee dragged down benchmark indices. The BSE Sensex plummeted 777.94 points, or 1.04%, to 74,003.82, while the NSE Nifty 50 slipped 279.50 points, or 1.19%, to 23,118.60, its lowest close since April 6.

Nifty Midcap 100 and Smallcap 100 fell 2.1% and 2.4%, respectively, marking their steepest one-day decline since May 12. Brent crude hovered near $107–108 a barrel, supported by fresh assaults on Saudi energy infrastructure and unresolved Middle East supply issues, while US 10-year Treasury yields breached 5% for the first time since 2007.

India's retail inflation spiked to a 20-month high of 4.82% in August, pushing the 10-year government bond yield to a four-month high of 7.09%. Domestic markets continued their recent correction as high crude prices and rising global bond yields weighed on sentiment, with 434 of the 500 stocks in the Nifty 500 slipping. Of the 500 stocks in the Nifty 500, 434 ended in the red.

Market breadth contracted sharply, with the advance-decline ratio falling to 0.36. The Nifty IT index was the sole bright spot, gaining 2.2% amid calls for a measured pace of AI development by OpenAI and Anthropic leadership. HCL Technologies, Infosys, and TCS led the Nifty 50 gainers, while Nifty Realty, Nifty Metal, and Nifty Defence plummeted amid profit-taking following an 18% year-to-date rally.

BEL and Shriram Finance were the session's biggest losers. The rupee weakened for a fifth consecutive session, closing at 95.96 against the dollar, a 40-paise depreciation, as global bond yields and rising crude oil prices pressured the currency. The US Federal Reserve's September 15–16 policy meeting looms large, with the rate decision expected on Wednesday, and analysts warn that any recovery attempt will likely face fresh selling until the Fed's verdict.