India’s stock market witnessed a sharp downturn on Wednesday morning, reversing the early-week gains. While the first two trading sessions remained in the green, both Sensex and Nifty50 slipped into the red by the third session, indicating growing market pressure.
On Wednesday, the Sensex dropped nearly 800 points from its previous close, falling 1.01 per cent to settle at 78,469 points. The Nifty50 also mirrored the decline, slipping over 200 points. The benchmark index of the National Stock Exchange fell 0.88 per cent to 24,359 points, reflecting broad-based weakness in the market.
Small caps shine amid broader market weakness
Despite the fall in benchmark indices, small-cap stocks offered a silver lining. The Nifty Small Cap 100 index rose 0.43 per cent, while the Nifty Small Cap 250 index gained 0.36 per cent. However, mid-cap indices did not share the optimism and declined between 0.11 per cent and 0.20 per cent.
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Sectoral indices show mixed trend; IT stocks drag
Sector-wise, the market presented a mixed picture. Indices such as Nifty Energy, Commodities, India Defence, FMCG, Metal, Realty, PSU Bank, and Oil & Gas managed to stay in positive territory.
On the flip side, Nifty IT emerged as the biggest laggard, plunging more than 3.5 per cent. Other sectors, including the Capital Market, Private Bank, Financial Services, and Banking, also remained under pressure.
Interestingly, global markets remained upbeat. US President Donald Trump’s announcement to extend the ceasefire period with Iran eased geopolitical concerns in West Asia. This development also led to a dip in crude oil prices, which fell 0.33 per cent to $89.37 per barrel.
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Following this, markets in Japan, South Korea, and Hong Kong traded in the green, while US markets also closed higher. However, Dalal Street failed to mirror this global optimism.
Rupee weakness and FII outflow weigh on sentiment
Market experts attribute the downturn to domestic factors. The Indian rupee weakened by 0.39 per cent against the US dollar, slipping to 93.49. Additionally, foreign institutional investors (FIIs) pulled out funds during the first two sessions of the week.
According to analysts, this combination of currency depreciation and foreign capital outflow created instability, dragging down the Sensex and Nifty50 despite supportive global cues.
