FX.co ★ Indian Stocks Slide to Near 3-Year Lows

Indian equities fell for a second consecutive session on Thursday, closing at their lowest levels in 32 months, as they tracked a global equity sell-off driven by surging energy prices and a renewed spike in bond yields. The S&P BSE Sensex declined 1.4% to 71,593, while the NSE Nifty 50 dropped 1.6% to 22,232.

Oil and fuel prices jumped following reports that the Pentagon may be planning strikes against Iran, raising the risk of fresh disruptions to tanker traffic in the Middle East and reversing recent improvements in maritime transit. The resulting pickup in inflation concerns pushed Indian government bond yields higher, extending the impact of the Reserve Bank of India’s decision yesterday to raise its policy rate for the first time in three years, a move that is expected to weigh on credit growth.

Elevated energy costs also pressured the rupee amid renewed capital outflows, a dynamic that typically prompts foreign investors to pare exposure to rupee-denominated equities. Sectors with high energy consumption bore the brunt of the sell-off: industrials and power-intensive manufacturers declined sharply, with Tata Motors, Adani Ports, Power Grid, ITC, and Tata Steel falling between 2.5% and 4%.