The Indian stock market witnessed a sharp decline in Thursday’s trading session, with the benchmark Sensex slips over 400 points and the Nifty 50 slipping below the key psychological level of 25,150. The sell-off was triggered primarily by weak performance in the IT and oil & gas sectors, coupled with increased volatility as reflected by a 2.5% jump in the India VIX.
Market Snapshot
At the close of the market:
- BSE Sensex dropped 403.25 points or 0.54% to settle at 73,115.82
- Nifty 50 fell 120.35 points or 0.48% to close at 25,136.90
- India VIX, the volatility index, surged 2.5% to 13.85, indicating rising investor nervousness
Key Reasons Behind the Market Fall
1. Weakness in IT Stocks
Information Technology stocks led the decline amid global uncertainty and profit booking. Companies such as TCS, Infosys, HCL Tech, and Tech Mahindra faced strong selling pressure due to:
- Concerns over U.S. and European tech spending
- Weak global cues from NASDAQ
- Strong rupee hurting export-oriented earnings
Infosys fell by 2.3%, while Tech Mahindra and Wipro dropped around 1.8% and 2.1% respectively.
2. Oil & Gas Sector Drag
Oil & gas stocks also pulled the indices down due to falling international crude oil prices and reduced refining margins. Reliance Industries, which holds the highest weightage in both Sensex and Nifty, dropped nearly 2%. ONGC and Indian Oil Corporation also saw losses of over 1%.
India VIX Indicates Caution
The India VIX, often considered the “fear index,” jumped 2.5%, suggesting that market participants are turning cautious ahead of key earnings reports and global central bank decisions. Rising volatility usually indicates a potential for sharp market movements in the coming sessions.
Other Sectoral Performances
- Nifty IT index fell 1.7%, the worst-performing sectoral index for the day.
- Nifty Oil & Gas dropped 1.3% amid weakness in crude-linked stocks.
- Nifty Auto and Nifty Pharma showed mild resilience, ending almost flat.
- Nifty FMCG managed to gain around 0.4%, with stocks like Hindustan Unilever and ITC supporting the index.
Top Nifty Losers
- Infosys: -2.3%
- Reliance Industries: -2.0%
- Wipro: -2.1%
- Tech Mahindra: -1.8%
- ONGC: -1.5%
Top Nifty Gainers
- Hindustan Unilever: +1.2%
- ITC: +0.9%
- Sun Pharma: +0.7%
- Titan: +0.6%
- Britannia: +0.5%
Global Cues Remain Unfavorable
Global equity markets were also in red, which had a spillover effect on Indian markets. Investors are awaiting key policy statements from the U.S. Federal Reserve, European Central Bank, and Bank of Japan regarding interest rate outlooks.
- Dow Jones Futures traded marginally lower
- Asian markets like Nikkei and Hang Seng showed weakness
- Brent Crude fell to $81.25 per barrel, dragging down oil-linked equities
Rupee Movement
The Indian Rupee strengthened marginally to 82.45 against the U.S. dollar. A stronger rupee generally hurts exporters like IT companies, which partly explains the underperformance in tech stocks.
Expert Opinions
Ravi Singhal, CEO at GCL Broking said:
“The sharp drop in IT and Reliance has dented sentiment. Traders should remain cautious as the volatility index is rising and global uncertainty remains.”
Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities mentioned:
“Markets are showing fatigue after a strong rally in the past few weeks. Some consolidation is likely, and we may see a buying opportunity after a minor correction.”
Technical Outlook
The Nifty has broken below its immediate support level of 25,200, which may now act as resistance in the short term. If selling continues, the next support is seen at 24,950. For the Sensex, the 73,000 mark will be crucial to watch.
What Should Investors Do?
- Short-term traders should stay cautious and avoid aggressive bets until volatility subsides.
- Long-term investors can use corrections to accumulate quality stocks, especially in FMCG and pharma sectors which are showing relative strength.
- Watch global signals: U.S. economic data and central bank commentary will play a key role in the coming days.
Conclusion
The decline in Sensex and Nifty highlights growing caution among investors, especially in sectors like IT and oil & gas that are sensitive to global trends. With the India VIX inching higher, volatility may persist in the near term. Experts advise a balanced approach with a focus on quality stocks as markets remain choppy.
I am a digital marketing executive as well as content writer in the stock market and crypto related blogs. My goal is to provide simple, interesting and reliable information to readers through my articles so that they always stay updated with the world of stock market and crypto.
