Indian stock markets witnessed a sharp sell-off on Thursday, October 8, with benchmark indices falling for the second consecutive session.
Investors remained cautious amid the Reserve Bank of India’s (RBI) hawkish policy stance, rising crude oil prices, a weak rupee and continued selling by foreign investors.At 1:55 pm, the BSE Sensex was down 1,068.14 points, or 1.49%, at 71,559.65.
The index opened at 72,668 and touched an intraday low of 71,550.76.The NSE Nifty fell 362.20 points, or 1.60%, to 22,241.40. It opened at 22,599.05 and slipped to a low of 22,228.
The broader market also came under heavy pressure. The Nifty Midcap 100 fell 1.84%, while the Nifty Smallcap 250 declined 2.04%. The Nifty Microcap 250 dropped 2.46%.
Why Is the Stock Market Falling?
RBI’s hawkish stance: The RBI raised the repo rate by 25 basis points to 5.50% and changed its policy stance from “neutral” to “calibrated tightening”. The move has raised concerns that borrowing costs could remain high for longer and put pressure on corporate earnings and consumption.
Crude oil crosses $102: Brent crude prices moved above $102 a barrel amid concerns over supply disruptions linked to US-Iran tensions and attacks on oil tankers. Higher crude prices could increase India’s import bill and add to inflationary pressure.
Rupee under pressure: The rupee weakened to around Rs 96.75 against the US dollar, despite the RBI’s rate hike. High crude prices, strong dollar demand and foreign fund outflows have added pressure on the currency.
Heavy FII selling: Foreign institutional investors sold shares worth Rs 6,121.37 crore on Wednesday, increasing pressure on Indian equities.Weak global markets: Asian markets traded lower, while US stocks also ended lower on Wednesday. Rising US Treasury yields and expectations of tighter US monetary policy have further reduced investor confidence.
India VIX Rises 8.5%
The India VIX jumped 8.44% to 15.06, signalling a sharp rise in market volatility and investor anxiety.
Metal, Realty and Oil & Gas Stocks Fall
Most major sectors traded in the red. The Nifty Metal index fell 3.22%, making it the worst-performing sector. Nifty Oil & Gas declined 2.66%, while Nifty Realty dropped 2.41%.Other major losers included Healthcare (-2.18%), Pharma (-2.07%), Auto (-1.69%), FMCG (-1.64%) and Cement (-1.61%).
IT Stocks Buck the Trend
IT stocks were the only iymajor exception to the sell-off. The Nifty IT index gained 0.71%.
Among Sensex stocks, TCS rose 0.87%, Tech Mahindra gained 0.76%, Infosys advanced 0.69% and HCLTech increased 0.65%.
TCS shares remained in focus ahead of its September-quarter earnings announcement. Analysts expect the company to report an 11.2% year-on-year rise in quarterly revenue and a 14.2% increase in profit.