Equity benchmark indices snapped their recent rally on Thursday, with the BSE Sensex plunging 931 points and the NSE Nifty slipping below the 23,800 mark, as renewed tensions in West Asia dampened investor sentiment.
The 30-share Sensex dropped 931.25 points, or 1.20 per cent, to settle at 76,631.65, after falling as much as 1,215 points during intra-day trade. The broader Nifty declined 222.25 points, or 0.93 per cent, to close at 23,775.10.
The sharp decline came a day after a strong rally, as fading confidence in the US-Iran ceasefire triggered profit-booking across sectors. Concerns escalated after Iran reportedly closed the Strait of Hormuz again in response to Israeli strikes on Lebanon, raising fears over global oil supply disruptions.
A surge in crude oil prices further weighed on market sentiment. Brent crude rose over 3 per cent to USD 97.85 per barrel, fuelling inflation concerns for oil-importing economies such as India.
Weak cues from global markets also added to the pressure. Asian indices, including Japan’s Nikkei 225, South Korea’s Kospi, Shanghai’s SSE Composite and Hong Kong’s Hang Seng, ended lower. European markets were also trading in the red.
Among Sensex constituents, InterGlobe Aviation, Larsen & Toubro, HDFC Bank, ICICI Bank and Kotak Mahindra Bank were among the major laggards, reflecting broad-based selling, particularly in financial stocks.
On the other hand, Bharat Electronics, Power Grid, NTPC and Tata Consultancy Services managed to post gains, offering limited support to the indices.
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Market participants pointed to a combination of global and domestic factors behind the decline. “Ceasefire-led optimism faded as renewed US–Iran tensions and ongoing restrictions at the Strait of Hormuz pushed crude back up, reviving concerns around India’s inflation,” said Vinod Nair, Head of Research at Geojit Investments Limited.
He added that profit-booking following the previous session’s rally, rising bond yields and a weakening rupee also dampened near-term risk appetite. Financial stocks, which had led the earlier rally, saw the sharpest corrections amid continued foreign institutional investor (FII) selling.
Data showed that FIIs offloaded equities worth ₹2,811.97 crore on Wednesday, while domestic institutional investors (DIIs) provided some support by purchasing shares worth ₹4,168.17 crore.
Analysts said the decline reflected cautious investor behaviour in an uncertain global environment. “Today’s fall appears largely driven by profit-booking, with participants choosing to lock in gains rather than carry fresh risk,” said Hariprasad K of Livelong Wealth.
The pullback follows Wednesday’s surge, when the Sensex had rallied nearly 2,946 points and the Nifty gained over 870 points on ceasefire optimism.
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