Equity benchmark indices Sensex and Nifty fell more than 2% on Thursday, driven down by a drop in heavyweight stocks such as Reliance Industries and HDFC Bank, alongside escalating conflict in the Middle East.
The BSE Sensex lost 1,769.19 points, or 2.10%, to close at 82,497.10, after plunging as much as 1,832.27 points during the session. The NSE Nifty also experienced a significant decline, down 546.80 points, or 2.12%, settling at 25,250.10.
Analysts attributed the downturn to continuous foreign fund outflows and rising crude oil prices, which have dampened investor sentiment.
Among the 30 firms listed on the Sensex, major laggards included Larsen & Toubro, Reliance Industries, Axis Bank, Asian Paints, Tata Motors, Bajaj Finance, Maruti, Bajaj Finserv, Kotak Mahindra Bank, Titan, Adani Ports, and HDFC Bank. JSW Steel was the only stock to register gains.
"The domestic market faced a sharp decline following Iran’s ballistic missile launches at Israel, heightening fears of retaliation and escalation of the conflict," said Vinod Nair, Head of Research at Geojit Financial Services.
He added that new regulations from the Securities and Exchange Board of India (SEBI) for the futures and options segment have raised concerns about reduced trading volumes in the broader market. Additionally, with attractive valuations in China, foreign institutional investors (FIIs) have redirected their funds, adding further pressure on Indian stocks.
In Asian markets, Hong Kong closed lower, while Tokyo finished in positive territory. Markets in mainland China will remain closed for the remainder of the week due to a holiday. European markets were mostly lower, while US markets ended marginally higher on Wednesday.
Data from exchanges indicated that FIIs offloaded equities worth ₹5,579.35 crore on Tuesday.
Global oil benchmark Brent crude increased by 1.37% to USD 74.91 a barrel.
The BSE benchmark had dipped by 33.49 points, or 0.04%, to settle at 84,266.29 on Tuesday, while the Nifty ended slightly lower by 13.95 points, or 0.05%, at 25,796.90. The equity markets were closed on Wednesday for Mahatma Gandhi Jayanti.
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