India’s stock market witnessed a sharp decline on Thursday as Sensex tumbled over 500 points and the Nifty fell below the 24,550 mark, weighed down by selling pressure in banking, IT, and FMCG stocks. The negative sentiment was largely driven by muted global cues, weakness in Asian markets, and cautious investor sentiment ahead of a key speech by US Federal Reserve Chair Jerome Powell.
Sensex and Nifty Close in Red
The BSE Sensex dropped 568.40 points, or 0.69%, reaching an intraday low of 80,762.16. Similarly, the NSE Nifty declined by 172.45 points to settle at 24,494.45, also down by 0.69%. This marks a significant pullback from recent highs as investors chose to book profits amid global uncertainty.
Top Drags: Power Grid, NTPC, Cipla, IndusInd Bank, Infosys
Among the top losers on the indices were Power Grid Corporation of India, NTPC, Cipla, IndusInd Bank, and Infosys, each falling up to 1.5%. These stocks dragged down the broader market as sectoral indices also reflected bearish sentiment.
Key Reasons Behind Market Decline
1️⃣ Powell Speech in Focus
Investors across global markets are closely watching for any signals from US Fed Chair Jerome Powell, who is scheduled to speak later today. Market participants are hoping for clarity on the future path of interest rates, especially after the Fed kept rates unchanged last week. Any hawkish tone in Powell’s remarks could dent investor confidence and trigger a global risk-off sentiment.
2️⃣ ‘Sell India; Buy China’ Strategy Raises Concern
A notable concern among analysts is the potential rotation of foreign capital from Indian largecaps to Chinese equities.
According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, “The market appears to be heading for a near-term consolidation, with mid and smallcaps continuing to outperform. The robust FII buying that supported largecaps may taper off if a tactical ‘Sell India; Buy China’ trade emerges.”
This sentiment could explain the recent pullback in Indian equities despite stable fundamentals.
3️⃣ Rupee Weakens Ahead of Fed Speech
Adding to the pressure, the Indian rupee weakened by 32 paise, falling to 85.64 against the US dollar in early trade. The currency’s slide was driven by weakness in domestic equities and uncertainty around Powell’s upcoming comments.
A weak rupee often amplifies foreign investment concerns, especially in volatile market conditions.
4️⃣ Weak Asian Market Cues
Asian markets traded in the red, with major indices in South Korea, Japan, China, and Hong Kong all posting losses. This, coupled with a mixed close in the US overnight, offered little support to Indian equities, further reinforcing the cautious mood.
Technical View: Nifty in Tight Range
From a technical perspective, Nifty remains in a narrow range, according to Anand James, Chief Market Strategist at Geojit Financial Services.
He highlighted a symmetrical triangle formation on the daily chart, suggesting a potential upside towards 25,200. However, momentum indicators don’t currently support a sharp rally. On the downside, the 24,500–24,400 zone may offer strong support, possibly limiting further declines.
Conclusion
Thursday’s market decline reflects the broader uncertainty prevailing in global markets, with investor sentiment turning cautious ahead of critical central bank commentary.
While mid and smallcap stocks remain relatively resilient, largecap stocks—particularly in banking, IT, and FMCG—are under pressure.
All eyes are now on Jerome Powell’s speech, which could set the tone for global markets in the coming days.
