Indian equity markets witnessed significant selling pressure on Thursday, with benchmark indices declining sharply amid multiple headwinds. The BSE Sensex opened 358.54 points lower and traded 336.63 points or 0.46% lower at 73,624.64, while the NSE Nifty 50 declined 117 points or 0.40% to 23,098.30. The Bank Nifty declined 642.80 points or 1.18% to 53,853.45. Market breadth remained decisively negative with 3,007 stocks declining against 1,172 advances on the NSE, reflecting widespread risk aversion among investors. A total market capitalisation of ₹5 lakh crore was wiped out from the listed companies at BSE, bringing the total market cap down to approximately ₹456 lakh crore. As per latest reports, the Sensex initially plummeted by over 700 points to touch the 73,500 mark before seeing minor recovery, while the Nifty 50 was trading at 23,206.85 as of 12:10 PM, attempting to recover from an intraday low of 23,070.15. Both the blue-chip indexes closed at two-month lows, with fifteen of the 16 major sectors declining, highlighting the broad-based nature of the selloff.
Sectoral performance showed widespread selling across all major indices, with technology and metal stocks bearing the brunt of the selloff. As reported by HDFC Securities, Nifty IT, Nifty Metal, Nifty Auto, and Nifty Realty indices fell by over 1.5% during the session. The Nifty Realty and Nifty Metal indices were the worst performers, both falling more than 2%, with realty stocks coming under pressure as higher interest-rate concerns and broader market weakness weighed on sentiment. Auto stocks also revved down with their index declining 1.8%, while losses were pronounced in consumer durables, media, infrastructure, power, energy and oil & gas stocks, each declining more than 1%. Despite the overall weakness, Max Healthcare, Power Grid Corporation, Bharat Electronics, Tech Mahindra and Nestlé India managed to buck the broader trend and ended the session in the green as the top gainers. Among the Sensex constituents, HCL Tech, Infosys, Tech Mahindra, Tata Consultancy Services, Eternal and Trent were among the biggest laggards, while Power Grid, ICICI Bank, Bharti Airtel and InterGlobe Aviation were among the winners. The market bloodbath was driven by three primary factors: US President Donald Trump has intervened, urging Israeli Prime Minister Benjamin Netanyahu against further retaliation to preserve ongoing peace negotiations.
Market sentiment remained fragile with increased volatility levels amid a surge in global crude oil prices following escalating tensions in the Middle East. Brent crude rose 1.70% to $94.68 per barrel as fresh military action by the United States against Iranian targets has reignited concerns over the stability of the Middle East, raising fears that recent diplomatic efforts may be losing momentum and increasing the risk of a broader regional conflict. Rising oil prices, weakness across Asian markets and continued uncertainty surrounding global monetary policy prompted investors to adopt a more cautious stance. The conflict immediately disrupted energy markets, sparking fears over the safety of the Strait of Hormuz. Brent crude surged by more than 3.5% to cross $96.40 a barrel, while West Texas Intermediate (WTI) climbed above $93.50. For India, which relies heavily on crude imports, this surge amplifies concerns regarding inflation and a widening current account deficit. Metal stocks also witnessed heavy selling amid concerns over slowing global growth and weaker risk appetite, with Hindalco and other metal counters coming under pressure as investors moved away from cyclical sectors. Gold prices also fell 0.4% to $4,313.11 per ounce by 0302 GMT, after prices fell about 3% on Friday, hitting the lowest since March 24.
The weakness in Indian equities was significantly influenced by sharp corrections across global markets and continued uncertainty surrounding global monetary policy. Asian markets started the week on a weak note after heavy selling in technology stocks triggered panic across the region. South Korea's Kospi index plunged as much as 9% before recovering partially and remained down 8.29%, while Japan's Nikkei 225 index dropped 3.85%. Hong Kong's Hang Seng slipped nearly 2%, and China's CSI 300 lost 1.5%. The selloff followed a major correction on Wall Street on Wednesday, with the Dow Jones Industrial Average falling over 950 points as Wall Street witnessed a sharp correction overnight, with the weakness being broad-based as investors moved away from risk assets amid fears that escalating geopolitical tensions could disrupt energy markets and keep inflationary pressures elevated. Technology stocks remained under pressure for a fourth consecutive session as investors continued to pare exposure to the sector following a sharp selloff in global tech shares, with Wipro emerging as the top loser among Nifty constituents. The broader small-caps and mid-caps declined about 1.9% and 1.4% respectively, as investors booked profits in high-beta stocks following a strong rally in recent months. Markets in Europe were trading in the negative territory, adding to global market weakness.
While India's macroeconomic fundamentals remain supported by stronger-than-expected GDP growth, global factors are likely to dictate near-term market direction. A sustained rise in oil prices could add to inflationary pressures and weigh on corporate earnings, keeping investors cautious in the sessions ahead. Going forward, investors will closely monitor crude oil prices and developments in the Middle East, which have emerged as the primary drivers of market sentiment. Inflation in the US has spiked to 4.2% indicating the possibility of rate hike by the Fed, according to Dr V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd. Higher US bond yields could continue to pressure global equities, particularly technology stocks, with foreign institutional investors currently showing limited interest in Indian equities. The weakness might linger for sometime, as noted by Vijayakumar, despite measures taken by the Reserve Bank of India and the government helping stabilise the rupee to some extent. The broader market fared even worse than the headline indices, highlighting the extent of the risk-off mood, with the Nifty Midcap 100 index falling 1.4% while the Nifty Smallcap 100 index declined 1.9% as investors booked profits in high-beta stocks following a strong rally in recent months. Furthermore, persistent offloading by Foreign Institutional Investors (FIIs) exacerbated the market's weakness, with FIIs selling Indian equities worth ₹2,124.98 crore on Wednesday, adding to the ₹3.27 lakh crore pulled out so far this year. The Indian Rupee also weakened, hitting an intraday low of 95.65 against the US dollar.
