Market Overview
Mumbai: The Indian equity markets experienced a significant downturn on Thursday, with the Sensex plunging by 592.67 points and the Nifty dropping to 25,877.85. This decline was attributed to ongoing foreign fund withdrawals and a lack of clarity regarding the US Federal Reserve’s future interest rate decisions, which negatively impacted investor confidence.
The BSE Sensex closed at 84,404.46, reflecting a decrease of 592.67 points or 0.70%. At one point during the trading session, it fell by as much as 684.48 points, reaching a low of 84,312.65.
Similarly, the NSE Nifty fell by 176.05 points or 0.68%, settling at 25,877.85.
Among the major companies on the Sensex, Bharti Airtel, Power Grid, Tech Mahindra, Infosys, Bajaj Finance, and Reliance Industries were notable losers.
Conversely, companies like Larsen & Toubro, Bharat Electronics, UltraTech Cement, and Maruti saw gains.
Data from the exchange indicated that Foreign Institutional Investors (FIIs) sold equities worth Rs 2,540.16 crore on Wednesday, while Domestic Institutional Investors (DIIs) purchased equities worth Rs 5,692.81 crore during the same period.
“The US Federal Reserve’s decision to cut interest rates by 25 basis points was anticipated. However, the market reacted to Chair Jerome Powell’s comments suggesting this could be the final rate cut of 2025, which tempered expectations for further monetary easing. This led to a stronger US dollar and a risk-averse sentiment in emerging markets, including India,” explained Vinod Nair, Head of Research at Geojit Investments Limited.
In the Asian markets, the SSE Composite index in Shanghai and the Hang Seng index in Hong Kong both closed lower, while South Korea’s Kospi and Japan’s Nikkei 225 index finished positively.
European markets were also trading downwards, and US markets had a mixed performance on Wednesday.
“The market faced widespread selling on Thursday as uncertainty regarding the US Federal Reserve’s future rate cuts overshadowed previous optimism, leading to a cautious approach among investors. While FIIs continued to take profits, DIIs provided selective buying support, which helped mitigate a more severe market decline,” stated Ponmudi R, CEO of Enrich Money, a trading and wealth technology firm.
The global oil benchmark, Brent crude, saw a slight decrease of 0.59%, trading at USD 64.54 per barrel.
On the previous day, the Sensex had gained 368.97 points or 0.44%, closing at 84,997.13, while the Nifty increased by 117.70 points or 0.45%, reaching 26,053.90.