Indian equity markets extended their decline for the third consecutive session on Thursday, with the BSE Sensex falling 187.90 points (0.24%) to settle at 77,966.35 and the NSE Nifty dropping 40.10 points (0.16%) to close at 24,395.85. According to Choice Equity Broking, the markets remained on edge amid a familiar bind of benign domestic inflation print on one hand, and a near-blocked Strait of Hormuz on the other. Brent crude hovered around $87–89 per barrel, while WTI fell over 1% to around $81.5 per barrel amid signs of softer demand. During the trading session, the Sensex tumbled 656.32 points (0.83%) to an intraday low of 77,497.93 before recovering some losses in the closing session. As noted by Geojit Investments, elevated crude oil prices remain a key overhang, with geopolitical uncertainty in the Middle East preventing a stronger risk-on move.
TCS dropped the most by 3.71% among Sensex constituents following the announcement that N Chandrasekaran will step down as Chairman of group holding company Tata Sons when his current term ends on February 20, 2027. Chandrasekaran, who has spent 40 years with the Tata Group and served as TCS CEO from 2009 to 2017, was the biggest drag on the index. Other Tata Group stocks including Mahindra & Mahindra, Tata Steel, Larsen & Toubro, Eternal and Infosys were also among the major losers. The selling in Tata Group stocks after the exit announcement contributed to the underperformance of large-cap stocks relative to the broader market, as noted by Geojit Investments.
The session was dominated by developments in the Strait of Hormuz, where traffic has plunged 90% with Iran disputing US control claims and peace talks stalled. According to The Hindu BusinessLine, this development could reignite the energy price spiral India endured in July. Domestic crude futures slipped nearly 2.5% to below the ₹7,800 mark, while India's CPI inflation accelerated to 4.45% in July from 4.4% in June, the second consecutive month above the Reserve Bank of India's 4% medium-term target, driven by higher fuel and food costs linked to shipping disruptions. WPI manufacturing inflation also rose sharply to 7.5% in June. The rupee weakened 10–11 paise to close around 95.43–95.48 against the dollar, underperforming Asian peers as importer dollar demand combined with the inflation reading and elevated crude kept pressure on the domestic currency.
Among sectoral indices, Realty, FMCG, and Chemicals offered support, while Metal, Banking, Financial Services, and Oil & Gas remained under pressure. The Bank Nifty bore the brunt, closing at 57,635.25, down 250.60 points or 0.43%. The broader market held its ground, with the Nifty Midcap 100 gaining 0.15% and the Nifty Smallcap 100 advancing 0.27%, with stock-specific action keeping participation alive. Among Sensex shares, Tata Consumer Products, NTPC, and Tata Motors Passenger Vehicles were among the top Nifty gainers, while Hindalco, ICICI Bank, and UltraTech Cement dragged. Foreign Institutional Investors (FIIs) bought equities worth ₹258.55 crore on Tuesday, according to exchange data.
The earlier correction in the KOSPI is better viewed as a repricing of expectations rather than the end of the AI story, said Harendra Zatakia, a Sebi-registered investment advisor and Founder of Wealth Aligned Financial Advisory. As reported by Mint, Samsung Electronics and SK Hynix together account for more than half of the KOSPI's market capitalisation, making the index highly sensitive to sentiment around semiconductors and AI. After a strong rally, valuations had begun reflecting very optimistic expectations around AI-driven earnings, with concerns over the pace of AI infrastructure spending and memory-chip demand triggering the correction. According to HST Wealth, with Brent crude edging closer to the USD 90-per-barrel mark, investors turned increasingly cautious amid persistent uncertainty surrounding US-Iran negotiations and renewed disruptions to shipping through the Strait of Hormuz.
According to Zatakia, India has not avoided concentration risk but the nature of that risk is quite different from the KOSPI's heavy semiconductor dependence. According to Mint reports, Financial Services account for about 35% of the index, Oil & Gas accounts for about 10%, IT contributes about 9%, Automobiles make up around 7%, and FMCG stands at 6%. Sharad Koli, an economist and market expert, highlighted that India is not relying on just one industry to drive the market, unlike South Korea's KOSPI, with domestic consumption, financial services, infrastructure, manufacturing and technology all contributing to a more balanced market structure. Looking ahead, Friday brings a cluttered calendar with India's WPI data, EU GDP figures, and US retail sales due, alongside quarterly results from Ashok Leyland, NMDC, Alkem Laboratories, and Cochin Shipyard.
