Mumbai, April 9 – The Sensex and Nifty benchmark indices experienced heavy selling pressure, leading to significant declines on Thursday after investors reduced their exposure to financial, banking, and IT stocks due to renewed tensions in the West Asia, which had previously fueled optimism following a ceasefire.
Weak trends in Asian and European markets, a surge in crude oil prices, and continued foreign fund outflows further dampened investor sentiment in the domestic market.
The 30-share BSE Sensex, which had been on a five-day winning streak, dropped by 931.25 points or 1.20%, closing at 76,631.65. During the day, it fell by 1,215 points or 1.56%, closing at 76,347.90.
The 50-share NSE Nifty declined by 222.25 points or 0.93%, closing at 23,775.10.
The ceasefire deal appeared to be in jeopardy following Iran's renewed closure of the Strait of Hormuz in response to Israeli attacks in Lebanon.
"Following Wednesday's rally following the ceasefire announcement, domestic markets ended the volatile session in the red, driven by uncertainty surrounding the ceasefire. Markets followed global cues as most markets ended in the red due to rising crude oil prices and overall global uncertainty," said Ankur Punj, Managing Director and Business Head at Equirus Wealth.
Among the major decliners on the 30-share Sensex were InterGlobe Aviation, Larsen & Toubro, Eternal, HDFC Bank, ICICI Bank, and Kotak Mahindra Bank.
Bharat Electronics, Power Grid, NTPC, and Tata Consultancy Services were among the gainers.
The BSE SmallCap Select index rose by 0.26%, and the MidCap Select index increased by 0.15%.
Within sectoral indices, the BSE Top 10 Banks fell by 1.86%, Private Banks by 1.75%, Bankex by 1.58%, Financial Services by 1.41%, PSU Banks by 1.21%, Services by 1.04%, and MidSmall Private Banks Quality Tilt by 0.88%.
However, Capital Goods rose by 1.64%, Metal by 1.30%, Power by 1.27%, Hospitals by 0.75%, Healthcare by 0.74%, Utilities by 0.69%, and Telecommunication by 0.42%.
Brent crude, the global oil benchmark, increased by 3.27% to $97.85 per barrel.
In Asian markets, South Korea's Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index, and Hong Kong's Hang Seng index closed lower after a sharp rally in the previous trading session.
European markets quoted in the negative territory during mid-session trading.
"Optimism related to the ceasefire faded due to renewed US-Iran tensions and ongoing restrictions at the Strait of Hormuz, which pushed crude prices up, reviving concerns about inflation in India," said Vinod Nair, Head of Research, Geojit Investments Limited.
Domestically, profit-booking, rising 10-year bond yields, and a weakening rupee reduced risk appetite. Financial stocks led the decline after a significant rally in the previous session amid sustained selling by foreign institutional investors, while broader markets remained relatively stable.
According to exchange data, foreign institutional investors (FIIs) sold equities worth Rs 2,811.97 crore on Wednesday. Domestic institutional investors (DIIs), however, purchased stocks worth Rs 4,168.17 crore.
US markets ended significantly higher on Wednesday. The Dow Jones Industrial Average jumped 2.85%, the Nasdaq Composite surged 2.80%, and the S&P 500 climbed 2.51%.
"Indian markets experienced a pullback, snapping the recent five-day winning streak as sentiment turned cautious amid fading confidence around the US-Iran ceasefire," said Hariprasad K, Research Analyst and Founder, Livelong Wealth. "Today's decline appears largely driven by profit-booking, with participants choosing to lock in gains rather than taking on fresh risk in an uncertain environment."
On Wednesday, the Sensex jumped 2,946.32 points or 3.95%, closing at 77,562.90. The Nifty soared 873.70 points or 3.78%, closing at 23,997.35.
