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Indian equity markets witnessed a bloodbath in early trade on Tuesday. Investors reacted sharply to a perfect storm of rising energy costs and persistent capital outflows.

The BSE Sensex plunged 711.86 points, or 0.94%, to 75,303.42 by 10:00 IST. The Nifty 50 followed suit, dropping 189.75 points, or 0.80%, to trade at 23,625.95. Market breadth was significantly weak, with nearly two shares falling for every one that managed to rise.

Crude Oil and Rupee Under Pressure

The main trigger for the slump is the volatile situation in West Asia. Brent crude futures rose to $105.14 per barrel as negotiations between the U.S. and Iran remain fragile. High oil prices are a major headwind for India, as they threaten to increase the trade deficit and push up inflation.

Adding to the local woes, the Indian Rupee is hovering near record lows of 95.32 against the U.S. Dollar. A weakening currency makes imports costlier and reduces the dollar-denominated returns for foreign investors, further fueling the market exit.

IT and Banking Stocks Lead the Rout

Technology stocks were the biggest laggards in the morning session. The Nifty IT index slumped nearly 3%. Major players like Infosys and TCS fell over 3% each as concerns grew over slowing global tech spending.

Banking heavyweights including HDFC Bank, ICICI Bank, and State Bank of India (SBI) also traded in the red. This sector is particularly sensitive to inflation worries and potential interest rate shifts.

Corporate Spotlight: Stocks in News

• JSW Energy: Shares tumbled nearly 7% despite the company reporting a 38% jump in quarterly net profit. Investors appeared to engage in "profit-booking" following the earnings announcement.
• Heritage Foods: The stock crashed 7.7% after the dairy firm reported a 36% decline in its consolidated net profit for the fourth quarter.
• Satin Creditcare Network: In a rare bright spot, this stock surged 14% after posting a massive jump in its quarterly net profit.
• Kalyan Jewellers: The stock remained under pressure, continuing its decline from the previous session following government advisories regarding non-essential gold purchases to save foreign exchange.

FPI 

Data shows that Foreign Portfolio Investors (FPIs) are pulling out of India at a record pace. On Monday alone, foreign investors sold shares worth ₹8,437 crore. While domestic institutions bought shares worth nearly ₹5,940 crore, it was not enough to stop the benchmark indices from sliding.

Investors are now looking toward upcoming U.S. inflation data and further updates on the Middle East conflict for fresh market direction. For now, the sentiment remains cautious with high volatility expected throughout the session.