Indian stock markets witnessed a sharp sell-off on Thursday, with the BSE Sensex plunging 1,045 points and the NSE Nifty declining more than 371 points amid rising crude oil prices, persistent foreign investor outflows and concerns over tighter monetary policy.
The 30-share Sensex fell 1.44 per cent to settle at 71,593.24, marking its lowest closing level in more than two-and-a-half years. During the session, the index dropped as much as 1,310 points to an intraday low of 71,327.75.
The NSE Nifty 50 declined 371.25 points, or 1.64 per cent, to close at 22,231.80, its lowest level in 21 months. The index also touched an intraday low of 22,179.90.
The benchmark indices extended their losses for a second consecutive session as investors reacted to mounting economic concerns and unfavourable global market cues.
Crude Oil Rally and RBI Policy Weigh on Markets
A sharp rise in international crude oil prices emerged as a major factor behind Thursday’s market decline. Brent crude surged more than 4 per cent to around $104.50 a barrel, intensifying concerns over inflation and India’s import bill.
Market sentiment was further affected by the Reserve Bank of India’s decision on Wednesday to raise the benchmark repo rate by 25 basis points to 5.50 per cent. The central bank also shifted its monetary policy stance from “neutral” to “calibrated tightening”, signalling a tougher approach to inflation.
The prospect of higher borrowing costs, combined with elevated oil prices and rising global bond yields, added to selling pressure across sectors.
Vinod Nair, head of research at Geojit Investments Limited, said the market downturn reflected the impact of the RBI’s hawkish policy stance, continued foreign institutional investor outflows, higher bond yields and a weakening rupee.
ITC, Power Grid and Aviation Stocks Among Major Losers
Selling pressure was widespread across the market, with several heavyweight companies contributing to the benchmark indices’ decline.
ITC emerged as the biggest loser among Sensex constituents, falling 4.24 per cent. InterGlobe Aviation declined 3.36 per cent, while Power Grid Corporation of India dropped 3.16 per cent. Bharat Electronics fell 3.10 per cent, Adani Ports declined 2.59 per cent and NTPC lost 2.43 per cent.
Tech Mahindra, Axis Bank and Infosys were among the few stocks that ended the session in positive territory.
Broader markets also suffered significant losses. The BSE SmallCap Select index fell 2.58 per cent, while the MidCap Select index declined 2.53 per cent. All BSE sectoral indices closed in the red, with power, metals, utilities and real estate among the worst-performing segments.
Foreign Investor Selling Adds to Pressure
Persistent selling by foreign institutional investors further weakened market sentiment. According to exchange data, foreign institutional investors sold equities worth approximately ₹6,121.37 crore on Wednesday.
The sustained outflows have added to concerns over the outlook for Indian equities, particularly as investors reassess valuations in the face of higher interest rates and rising energy costs.
Global markets also offered little support. Major Asian indices ended lower, while European markets traded in negative territory. The combination of international uncertainty, elevated crude prices and domestic monetary tightening continued to weigh on investor confidence.
Analysts cautioned that the near-term direction of the market would depend on movements in crude oil prices, foreign investment flows, the rupee and upcoming corporate earnings.
With inflationary pressures and the possibility of tighter monetary conditions weighing on sentiment, investors are likely to remain cautious in the sessions ahead.
