Bloomberg Index Delay Sparks Early Market Turmoil
Bloomberg Index Services decided to postpone the inclusion of Indian government securities in its Global Aggregate Index. This announcement triggered immediate market reactions on Tuesday morning.
Initial Market Reaction
The decision led to a sharp spike in gilt yields. Investor sentiment on Dalal Street turned negative. Stock prices dropped significantly. The rupee also weakened against the dollar during early trading hours.
Bond yields moved higher as prices fell. The benchmark 10-year gilt closed at a yield of 6.63%. This represented an increase of three basis points from Monday's close of 6.60%.
Stock Market Movement
The Sensex experienced substantial volatility throughout the day. It plunged over 600 points during early trading. However, late recovery efforts helped the index close 250 points lower at 83,628 points.
Foreign institutional investors led the selling pressure. Data from the Bombay Stock Exchange showed foreign funds were net sellers at Rs 1,500 crore. Domestic funds attempted to counter this by being net buyers at Rs 1,182 crore.
So far in 2026, foreign portfolio investors have net sold stocks worth Rs 15,509 crore. This translates to approximately $1.7 billion in outflows.
Currency Market Impact
The rupee faced pressure in the interbank foreign exchange market. It weakened to 90.33 against the dollar during mid-session trading. By closing time, it recovered slightly to settle at 90.19. This still represented a decline of 8 paise from Monday's close of 90.11.
Bloomberg's Statement
Bloomberg Index Services cited investor requests for further evaluation as the reason for the deferral. The company will provide additional updates about Indian gilt inclusion by mid-2026.
This delay comes at a challenging time for Indian bonds. Fully accessible route bonds have experienced record outflows recently. Many market participants expected inclusion to happen this month.
Market Capitalization Impact
The day's market slide reduced investor wealth significantly. Total losses amounted to Rs 1 lakh crore. The Bombay Stock Exchange's market capitalization now stands at Rs 467.8 lakh crore.
Individual Stock Performance
Among the thirty Sensex stocks, nineteen closed lower. Reliance Industries and Larsen & Toubro contributed most substantially to the index's decline.
Some buying activity helped cushion the overall fall. Purchases in ICICI Bank and Eternal provided partial support to market indices.
The market demonstrated resilience despite the initial shock. Early losses in bonds, stocks, and currency were largely recovered by closing time. Most instruments finished flat or only marginally lower.
