Indian Stock Market Plummets Amid Crude Oil Price Surge and PM Modi's Appeals

The Indian stock market witnessed a sharp selloff on May 11, as investor sentiment weakened amid a sharp rebound in crude oil prices after hopes of a near-term peace deal in West Asia faded. Adding to the pressure, realty and consumer durable stocks came under heavy selling after Prime Minister Narendra Modi urged a spate of measures to reduce consumption.

The Nifty ended the session with a 1.51% decline at 23,811, while the Sensex settled at 76,072, down 1.73% from the previous close. Both benchmark indices recorded their biggest single-day drop since April 24. The broader markets also witnessed heavy selling pressure, with both the Nifty Midcap 100 and Nifty Smallcap indices losing nearly 1% each.

Hopes of a quick resolution between the U.S. and Iran were clouded after U.S. President Donald Trump described Iran’s response to his peace proposal as “totally unacceptable.” Iran on Sunday reportedly released a proposal to end the war on all fronts, which included a demand for compensation for war damages and emphasized Iranian sovereignty over the Strait of Hormuz. The U.S., however, had proposed ending the fighting first before initiating talks on more contentious issues, including Iran’s nuclear programme.

Following Trump's rejection of Iran’s latest proposal, crude oil prices regained strength, with Brent crude rebounding to $105 a barrel. The Strait of Hormuz remains effectively closed as Washington and Tehran continue to struggle toward a diplomatic resolution, keeping energy prices elevated and fuelling concerns over inflation.

Meanwhile, real estate, consumer durables, jewellery, and travel-linked stocks witnessed sharp selling pressure after PM Modi made seven key appeals, including working from home, reducing petrol and diesel consumption, conducting online meetings, limiting travel, and refraining from non-essential gold purchases for a year.

Jewellery stocks emerged as the top laggards in trade, with shares of Kalyan Jewellers India and Titan Company plunging 9.3% and 6.7%, respectively. Realty stocks also witnessed sharp selling pressure, with Godrej Properties, Oberoi Realty, Anant Raj, Prestige Estates Projects, Macrotech Developers, and DLF falling between 3% and 4.2%.

Among auto stocks, Ashok Leyland crashed 4.2% to ₹161 apiece, while Tata Motors, Exide Industries, Mahindra & Mahindra, TVS Motor Company, and Bosch declined over 2% each. Shares of Urban Company plunged 10% to ₹126 apiece as investors were disappointed with the company’s March quarter earnings. Other new-age technology stocks such as Groww, Swiggy, and Eternal dropped 6%, 6%, and 4.1%, respectively. Capital goods stocks, including ABB India and Siemens, tumbled 9% and 7%, respectively.

Despite the broad-based selloff, some stocks managed to weather the storm, with shares of C.E. Info Systems, Affle, Krishna Institute of Medical Sciences, and Vodafone Idea gaining between 8.5% and 12.6%. Better-than-expected March quarter earnings also lifted shares of Tata Consumer Products by 8% to ₹1,271 apiece. EV-related stocks such as Ather Energy and JBM Auto gained 6% and 5%, respectively. Following the recent selloff, shares of HFCL witnessed renewed buying interest, surging 5.2% to ₹148.5 apiece. Other stocks, including Narayana Hrudayalaya, UPL, Hexaware Technologies, Global Health, Laurus Labs, and Bank of India, also rallied over 3% each.

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