Indian equities plunged on Thursday as investors digested the Reserve Bank of India's hawkish policy pivot, with the Sensex crashing more than 1,100 points to fall below 71,500 and the Nifty50 losing over 350 points to trade below 22,250, as seen at 2.12 pm.
The selloff wiped off nearly Rs 10 lakh crore from the total market capitalisation of all BSE-listed companies, pushing it below Rs 461 lakh crore. Both benchmark indices fell over 1.5 per cent each in one of the worst sessions of the year.
Seven factors behind the fall
Analysts pointed to a combination of domestic and global pressures. The RBI's first rate hike in nearly four years — a 25-basis-point increase to 5.50 per cent — was compounded by its surprise shift in stance from "neutral" to "calibrated tightening", which Jefferies expects to translate into around 100 basis points of hikes in the ongoing cycle.
Global bond yields soared to multi-year highs, with the US 30-year yield crossing 5.71 per cent and the 10-year above 5.3 per cent, pulling money toward debt markets. Brent crude jumped above $102 a barrel amid rising attacks on shipping in the Gulf, including a tanker struck north of Qatar.
Foreign investors extended their selling streak, offloading Rs 6,121 crore of Indian equities on Wednesday and nearly Rs 57,000 crore over nine consecutive sessions. Worries about further US Federal Reserve rate hikes — traders price an 80 per cent chance of a December increase — and weak global cues added to the pressure. South Korea's Kospi fell more than 2 per cent, while Japan's Nikkei, Shanghai and Hong Kong each dropped over 1 per cent.
Broad-based damage
ITC, Adani Ports, IndiGo, Power Grid and Reliance Industries fell up to 4 per cent to lead the Sensex losers, while heavyweight IT stocks including TCS, Infosys, Tech Mahindra and HCL Technologies rose up to 2 per cent to buck the trend. Nifty Metal sank 3 per cent, with Realty and Oil & Gas down about 2 per cent each. Market breadth was decisively negative: 2,645 declines against 693 advances on the NSE.
V.K. Vijayakumar, chief investment strategist at Geojit Investments, said two more 25-basis-point hikes were likely in this cycle, which would pressure valuations and keep foreign investors selling into rallies. "In brief, this frustrating period in the market might continue for some more time," he said, advising investors to stay with value stocks and look at opportunities in fixed income.
Sources:
- Why is market crashing today? Sensex slumps 1,100 points, Nifty below 22,250. 7 key factors behind Rs 10 lakh crore bloodbath
- Stock Market Today Live, Oct 8: Sensex plunges over 1,100 points, Nifty falls 1.72% as RBI stance, crude prices weigh
- Stock markets decline in early trade as RBI signals more tightening
The selloff wiped off nearly Rs 10 lakh crore from the total market capitalisation of all BSE-listed companies, pushing it below Rs 461 lakh crore. Both benchmark indices fell over 1.5 per cent each in one of the worst sessions of the year.
Seven factors behind the fall
Analysts pointed to a combination of domestic and global pressures. The RBI's first rate hike in nearly four years — a 25-basis-point increase to 5.50 per cent — was compounded by its surprise shift in stance from "neutral" to "calibrated tightening", which Jefferies expects to translate into around 100 basis points of hikes in the ongoing cycle.
Global bond yields soared to multi-year highs, with the US 30-year yield crossing 5.71 per cent and the 10-year above 5.3 per cent, pulling money toward debt markets. Brent crude jumped above $102 a barrel amid rising attacks on shipping in the Gulf, including a tanker struck north of Qatar.
Foreign investors extended their selling streak, offloading Rs 6,121 crore of Indian equities on Wednesday and nearly Rs 57,000 crore over nine consecutive sessions. Worries about further US Federal Reserve rate hikes — traders price an 80 per cent chance of a December increase — and weak global cues added to the pressure. South Korea's Kospi fell more than 2 per cent, while Japan's Nikkei, Shanghai and Hong Kong each dropped over 1 per cent.
Broad-based damage
ITC, Adani Ports, IndiGo, Power Grid and Reliance Industries fell up to 4 per cent to lead the Sensex losers, while heavyweight IT stocks including TCS, Infosys, Tech Mahindra and HCL Technologies rose up to 2 per cent to buck the trend. Nifty Metal sank 3 per cent, with Realty and Oil & Gas down about 2 per cent each. Market breadth was decisively negative: 2,645 declines against 693 advances on the NSE.
V.K. Vijayakumar, chief investment strategist at Geojit Investments, said two more 25-basis-point hikes were likely in this cycle, which would pressure valuations and keep foreign investors selling into rallies. "In brief, this frustrating period in the market might continue for some more time," he said, advising investors to stay with value stocks and look at opportunities in fixed income.
Sources:
- Why is market crashing today? Sensex slumps 1,100 points, Nifty below 22,250. 7 key factors behind Rs 10 lakh crore bloodbath
- Stock Market Today Live, Oct 8: Sensex plunges over 1,100 points, Nifty falls 1.72% as RBI stance, crude prices weigh
- Stock markets decline in early trade as RBI signals more tightening
