Mumbai: Domestic equity markets witnessed a sharp sell-off on Thursday, with the Sensex plunging over 1,200 points to close at 82,498 and the Nifty falling 365 points to settle at 25,454. The steep decline, which came after a three-day rally, eroded more than ₹7 lakh crore from the market capitalisation of BSE-listed companies, marking one of the most significant single-day wealth erosions in recent sessions.
Selling pressure was widespread, with all 30 Sensex constituents ending in the red, underscoring the intensity of the correction. On the NSE, the advance-decline ratio stood at 1:3, indicating that declining stocks vastly outnumbered gainers and reflecting weak market breadth.
Sectorally, banking and realty stocks bore the brunt of the downturn. The Nifty Bank index dropped 811 points to close at 60,740, while the Midcap index slid 956 points, signalling heavy selling beyond frontline stocks. The broader market also remained under pressure, dampening investor risk appetite.
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Global Tensions and Crude Oil Trigger Risk Aversion
Analysts attributed the fall to a combination of global and domestic factors. Escalating geopolitical tensions between the United States and Iran triggered risk aversion across global markets, which spilled over into Indian equities. At the same time, Brent crude climbing above $71 per barrel raised concerns for an oil-importing economy like India, as higher energy prices could fuel inflation and widen the current account deficit, weighing on equities.
The volatility gauge, India VIX, surged more than 9%, indicating heightened market nervousness. A sharp rise in VIX typically signals expectations of increased near-term volatility, prompting traders to cut leveraged positions and reduce exposure.
Among heavyweight losers were InterGlobe Aviation, Trent, UltraTech Cement and Mahindra & Mahindra. In the broader market, HPCL, Persistent Systems, Paytm, Poonawalla Fincorp and Godrej Properties also saw notable declines. However, oil producers such as ONGC and Oil India gained up to 5%, supported by the rise in crude prices, making them rare outperformers in an otherwise weak session.
Technical Signals and Near-Term Outlook
From a technical standpoint, the Nifty closing below the 25,500 mark is viewed as a negative signal. Analysts suggest that if the index sustains below this level, the next support zone lies in the 25,300–25,200 range, while the 25,900–26,000 band continues to act as a strong resistance on the upside.
Market experts believe the correction was driven by profit booking after the recent rally, rising global uncertainty and a spike in volatility. Investors are currently showing selective interest only in fundamentally strong stocks that are relatively insulated from global headwinds.
Overall, Thursday’s session indicates a shift towards caution in the markets. The trajectory of global cues, crude oil prices and geopolitical developments will play a key role in determining near-term market direction. If uncertainty persists, elevated volatility and choppy trading conditions are likely to continue. Investors are advised to consult their financial advisors before making investment decisions.
