Indian stock markets snapped a three-day winning streak on Wednesday, with the BSE Sensex plunging 756.84 points or 0.95 per cent to settle at 78,516.49. The broader NSE Nifty also declined sharply, dragged down by heavy selling in information technology (IT) shares and a spike in global crude oil prices.
Market Performance
The 30-share Sensex opened lower and extended losses through the session, hitting an intraday low of 78,442.30, down 831.03 points or 1.04 per cent. The index recovered slightly towards the close but still ended deep in the red. The Nifty 50 index fell by 224.55 points or 0.94 per cent to close at 23,784.15.
Key Drivers of the Decline
IT Stocks Under Pressure: Major IT firms such as Infosys, TCS, and Wipro witnessed significant selling, contributing heavily to the Sensex's fall. The Nifty IT index dropped over 2 per cent, reflecting concerns over global demand and margin pressures.
Rising Oil Prices: Brent crude oil prices surged past $90 per barrel, stoking fears of imported inflation and impacting investor sentiment. Higher oil prices are detrimental to India's economy as the country imports a large portion of its crude requirements.
Global Cues: Weakness in global markets, particularly in the US and Asian peers, added to the selling pressure. Investors remained cautious ahead of key economic data releases and corporate earnings.
Sectoral Impact
All sectoral indices ended in negative territory, with IT, realty, and oil & gas stocks being the worst hit. The BSE Realty index fell 1.8 per cent, while the BSE Oil & Gas index declined 1.5 per cent. Banking stocks also witnessed selling, though losses were relatively muted.
Market Breadth
Market breadth was negative, with 2,345 stocks declining on the BSE against 1,123 advances. About 150 stocks remained unchanged. The overall market capitalization of BSE-listed firms eroded by over ₹2 lakh crore during the session.
Expert Views
Analysts attributed the correction to profit-booking after three days of gains, coupled with negative global cues. They expect volatility to persist in the near term due to uncertainty over interest rates and geopolitical tensions.
The rupee also weakened against the US dollar, closing at 83.45, down 12 paise from the previous close, further dampening sentiment.
