Indian equity benchmarks slipped on Monday due to panic sell-offs by investors who were caught off guard by soaring crude prices after drone attacks on Saudi Arabia's oil facilities.
Marking its worst fall in over two weeks, the BSE gauge Sensex settled 262 points, or 0.70 per cent, lower at 37,123.31. The 30-share index plunged about 356 points in intra-day trade.
Likewise, the broader NSE Nifty closed 79.80 points, or 0.72 per cent, down at 10,996.10
Fresh geopolitical tensions in the Arabian peninsula diverted investors' attention from the struggling Indian economy for which the Indian government came out with another set of relief measures, including for the housing and exports sectors, over the weekend.
Tracking oil prices movement, the Indian rupee too came under a tremendous selling pressure, nosediving 67 paise to close at 71.60 against the US dollar.
On the Sensex chart, 24 scrips closed in the red and only 6 ended in the green.
Top losers in the Sensex pack included M&M, SBI, Yes Bank, Asian Paints, HDFC, Tata Steel and L&T, shedding up to 2.55 per cent.
On the other hand, TechM, ONGC, Sun Pharma, HUL, TCS and Bharti Airtel rose up to 1.44 per cent.
Hit by Saudi oil turmoil, sectoral indices like BSE oil and gas and energy fell the most, losing 1.61 per cent and 1.33 per cent, respectively. Other major sectoral losers were finance, bankex, realty, auto and capital goods indices.
Broader BSE midcap index ended 0.27 per cent lower, while BSE smallcap index jumped 0.64 per cent.
Crude oil benchmark, Brent Futures, surged by almost 20 per cent to USD 71.95 per barrel (intra-day) on Monday after twin drone attacks on Saturday wiped out more than half of Saudi Arabia's crude supply. It was also the biggest gain in Brent in dollar terms since futures started trading in 1988.
However, Brent Futures saw some moderation and was trading at USD 66.63 per barrel, still up 10.59 per cent over the previous close.
Shares of oil and gas companies HPCL, BPCL, IOC, Castrol India and Reliance Industries plunged as much as 7 per cent.
Stocks of aviation firms SpiceJet, InterGlobe Aviation and Jet Airways also cracked up to 3.95 per cent.
"Over the weekend, the drone strikes on Saudi have added to the trade war related uncertainties and deteriorated market condition globally," said Gaurav Dua, Sr VP, Head - Capital Market Strategy & Investments, Sharekhan by BNP Paribas.
"Moreover, the Indian economy will also get impacted due to surge in crude oil prices. No wonder, the Indian equity market ignored the important initiatives announced by the government to the support housing sector and boost exports, he added.
Finance Minister Nirmala Sitharaman on Saturday unveiled over Rs 70,000 crore of measures for exporters and the real estate sector, including about Rs 30,000 crore new spending in plans such as setting up of a stressed asset fund, as part of efforts to boost economic growth from a six-year low.
Further, government data on Monday showed that wholesale price-based inflation remained unchanged at 1.08 per cent in August. Inflation in food articles rose to 7.67 per cent in August from 6.15 per cent in July.
"Going ahead, if the tensions in Middle East worsen, it will have adverse impact on inflation prints," said Rahul Gupta, Head of Research - Currency, Emkay Global Financial Services.
Elsewhere in Asia, Shanghai Composite Index and Hang Seng ended in the red, while Kospi settled in the green.
Stock exchanges in Europe were also trading on a negative note in their respective early sessions.
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