Mumbai, Sep 24 (PTI) Stock markets tumbled on Thursday with the benchmark index Sensex tanking nearly 1,248 points to settle at an over three-month low due to across-the-board selling, led by financials, metal, auto and oil shares amid a spike in crude oil prices and surging US bond yields.

The 30-share BSE Sensex tanked 1,247.71 points, or 1.67 per cent, to settle near the day's low levels at 73,580.54, the lowest closing level since June 8. During the day, it plummeted 1,264.33 points, or 1.68 per cent, to 73,563.92.

The 50-share NSE Nifty dropped 383.70 points, or 1.64 per cent, to end at a more than five-month low of 23,063.10. As many as 47 Nifty constituents ended lower and three advanced.

Analysts said markets were weighed down by heavy selling in financial shares such as Axis Bank, Bajaj Finance and HDFC Bank after insurance regulator IRDAI proposed changes to the insurance distribution framework, including lower Expenses of Management limits and tighter controls on commissions.

Global factors such as high US bond yields and a spike in crude oil prices also dented the market sentiment, they added.

Among Sensex shares, Bajaj Finance dropped the most by 5.47 per cent, Axis Bank declined 4.67 per cent, Bajaj Finserv 4.06 per cent, InterGlobe Aviation 2.78 per cent, Trent 2.75 per cent, and Mahindra & Mahindra 2.31 per cent.

NTPC ended unchanged.

"On the sectoral front, banking and financials came under significant pressure after IRDAI proposed changes to the insurance distribution framework, including lower Expenses of Management limits and tighter controls on commissions. The proposals raised concerns about the earnings and distribution economics of insurers and other related financial intermediaries," Ajit Mishra, SVP - research, Religare Broking, said.

Brent crude, the global oil benchmark, jumped 2.36 per cent to USD 105.4 per barrel.

"Indian equity benchmarks closed sharply lower on Thursday, with the Nifty-50 and Sensex both falling more than 1.5 per cent, extending losses through the session after opening with a steep gap-down. The selloff was driven by a combination of surging global bond yields and a sharp rebound in crude oil prices," Ponmudi R, CEO of Enrich Money, an online trading and wealth tech firm, said.

The US 10-year Treasury yield climbed to around 5.11 per cent, while the 30-year yield touched its highest level since 2004, heightening concerns over tighter global financial conditions and the possibility of further Federal Reserve rate hikes, Ponmudi added.

The BSE MidCap Select index tanked 3.12 per cent and SmallCap Select index was down 1.19 per cent.

All BSE sectoral indices ended lower. MidSmall Private Banks dropped 2.81 per cent, Housing Finance 2.56 per cent, Financial Services 2.33 per cent, Insurance 2.20 per cent, MidSmall Private Banks Quality Tilt 2.13 per cent, Bankex 1.88 per cent, Private Banks index 1.85 per cent, Top 10 Banks 1.74 per cent, Metal 1.65 per cent and Services 1.43 per cent.

Shares of Max Financial Services tanked 9.81 per cent, HDFC Life Insurance Company slumped 6.13 per cent, The New India Assurance Company 5.36 per cent, Niva Bupa Health Insurance Company 4.98 per cent, ICICI Prudential Life Insurance Company 4.23 per cent, General Insurance Corporation of India 1.47 per cent and LIC 0.28 per cent on the BSE.

PB Fintech nosedived 35.98 per cent, while Turtlemint Fintech Solutions plunged 20 per cent.

A total of 2,884 stocks declined, while 1,473 advanced and 216 remained unchanged on the BSE.

"The domestic decline was amplified by the IRDAI consultation paper proposing tighter limits on insurance commissions, distribution expenses and loan-linked insurance practices. The potential pressure on bancassurance fees triggered heavy selling across insurers, distribution platforms and exposed banks and NBFCs, pushing Bank Nifty below 56,000 and extending the damage to the broader benchmarks," Hariselvan Radhakrishnan, Founder & CEO of HST Wealth, a Research Analyst firm, said.

In Asian markets, Japan’s Nikkei 225 ended in the positive territory, while Shanghai's SSE Composite index and Hong Kong's Hang Seng index settled lower.

Markets in Europe were trading in the negative territory. US markets ended lower on Wednesday.

Shares of the National Stock Exchange of India Ltd (NSE) ended nearly 2 per cent higher at Rs 1,818 in their debut trade on Thursday. NSE commanded a market valuation of Rs 4.49 lakh crore.

The Rs 22,569-crore initial public offering of NSE, the country's second-largest IPO, received nearly 6 times subscription on the final day of bidding on Monday, led by strong demand from institutional buyers.

"Markets came under pressure amid rising bond yields and a rebound in crude oil prices, reflecting heightened global macroeconomic risks. Investor sentiment turned increasingly risk-averse as concerns over the interest rate trajectory intensified, driven by lingering uncertainties around inflation and economic growth," Vinod Nair, Head of Research, Geojit Investments Ltd, said.

On the domestic front, the insurance and banking sectors remained weak following concerns regarding regulatory reviews of commission structures and their implications for profitability, he added.

Foreign Institutional Investors (FIIs) bought equities worth Rs 1,617.45 crore on Wednesday, according to exchange data.

On Wednesday, the Sensex climbed 299.17 points, or 0.40 per cent, to settle at 74,828.25. The Nifty was up 117.80 points, or 0.50 per cent, to end at 23,446.80. PTI SUM MR

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