Sensex Drops 151 Points, Nifty Slips Below 23,200: Key Reasons Explained

Indian benchmark equity indices ended lower on Thursday after a volatile trading session marked by weak global cues, rising geopolitical tensions in West Asia, higher crude oil prices and continued pressure on information technology stocks.

The BSE Sensex settled 150.63 points, or 0.20 per cent, lower at 73,832.55, while the NSE Nifty declined 53.35 points, or 0.23 per cent, to close at 23,161.60.

The trading day saw sharp swings as markets initially plunged, staged a robust recovery during the first half and briefly turned positive, before fresh selling pressure erased gains by the closing bell.

Why Did Markets Open Sharply Lower?

Investor sentiment was hit at the start of the session by renewed concerns over the escalating conflict between the United States and Iran. The tensions pushed crude oil prices higher, raising concerns about inflationary pressures and economic growth.

Reflecting these worries, the Sensex dropped 464.43 points to 73,518.75 in early trade, while the Nifty fell 142.9 points to 23,072.05.

Weakness in global equity markets further added to the negative sentiment.

How Did Markets Recover During the Day?

Despite the weak opening, domestic markets managed a strong rebound during the first half of the session.

At around 1:50 pm, the Sensex had recovered into positive territory, trading at 74,059.13, up 75.95 points. The Nifty also recovered sharply and hovered near the flat line at 23,217.90.

The recovery reflected buying interest in select heavyweight stocks, particularly in the banking sector. However, the rebound lacked sustainability as sellers returned later in the day.

What Caused the Late-Session Sell-Off?

The recovery lost momentum as investors continued to remain cautious about several macroeconomic risks.

Commenting on the market movement, Ajit Mishra, SVP-Research, Religare Broking Limited, said, "Markets remained volatile on the weekly expiry day and ended lower amid weak global cues. After a subdued start, the Nifty witnessed a swift rebound in the first half; however, the recovery completely fizzled out as the session progressed."

He noted that sectoral participation remained largely negative, with IT emerging as the top loser, followed by weakness in FMCG, energy and realty counters.

According to Mishra, investor sentiment remained fragile amid renewed escalation in West Asia and concerns over elevated global interest rates following stronger-than-expected US inflation data. He added that persistent foreign institutional investor outflows and a weaker rupee also weighed on market sentiment.

What Do Technical Indicators Suggest?

Despite the negative close, some analysts believe the market displayed resilience.

Market analyst Vipin Dixena highlighted the sharp intraday recovery despite the weak closing.

"Indian benchmark indices staged a dramatic turnaround, ending flat-to-positive after recovering from sharp early-morning losses. Both Sensex and Nifty now display a bullish inverted hammer candlestick pattern on daily charts, signaling buyer resilience," he said.

Dixena added that fresh US-Iran geopolitical tensions triggered the initial sell-off as surging crude oil prices rattled investors. He noted that Bank Nifty led the recovery through aggressive buying, while IT stocks remained under pressure amid global headwinds. Persistent profit-booking near key resistance levels, however, continued to cap the market's upside.

Which Sectors Were the Biggest Losers?

Information technology stocks emerged as the weakest segment of the market.

The Nifty IT index fell more than one per cent as concerns over global demand trends weighed on major technology companies. Other sectors that ended lower included FMCG, PSU Banks, Realty, Consumer Durables and Chemicals.

The broad-based weakness highlighted the cautious mood among investors amid mounting global uncertainties.

Which Sectors Offered Support?

Banking and pharmaceutical stocks provided some support to the market and helped limit the overall decline.

Meanwhile, Nifty Media stood out as the strongest performer, rising 1.78 per cent to close at 1,465.50.

Among Nifty constituents, Mahindra & Mahindra, ICICI Bank, Kotak Mahindra Bank, JSW Steel and Bharti Airtel were among the top gainers. Infosys, Adani Ports, HCL Technologies, Eternal and Bharat Electronics featured among the major laggards.

What Levels Should Investors Watch Going Forward?

Market participants are closely monitoring key support and resistance levels for indications of the next market move.

Mishra said the market continues to witness selling pressure on every rise, although rotational buying in select heavyweight stocks is helping contain the decline.

He cautioned that a decisive break below the 23,000 mark could trigger the next leg of correction, while upside momentum is likely to remain capped near the 23,500 level.

For now, investors remain focused on geopolitical developments, crude oil prices, global interest rate expectations and foreign investment flows, all of which are likely to determine the market's near-term direction.

(With inputs from ANI)