Indian stock market fell sharply on Thursday with the benchmarks -NSE Nifty and BSE Sensex - sliding 1% each. At close, the Sensex stood at the 81,691.98 level, falling 823.16 points, or 1%, while the NIFTY50 index settled at the 24,888.20 level, sliding 253.20 points, or 1.01%.
The sell-off is attributed to rising geopolitical tensions in the Middle East and investors turning cautious ahead of the U.S. inflation data.
“The downturn was attributed to intensified profit-booking and risk-off sentiment, as escalating geopolitical tensions in the Middle East overshadowed positive macro cues such as softening inflation and encouraging trade data. Investor mood remained cautious ahead of further developments on the US-China trade front, adding to market uncertainty,” said Bajaj Broking Research.
The broader markets underperformed, with the Nifty Midcap 100 and Smallcap 100 indices falling 1.6% and 1.78%, respectively, highlighting heightened selling pressure. Sectoral performance was uniformly weak, with all major indices closing in the red. Nifty Realty and Nifty Energy led the decline, shedding 2% and 2.04%, respectively.
Investors lost Rs 6 lakh crore on Thursday as the overall market capitalisation of firms listed on the BSE dropped to nearly Rs 449.6 lakh crore from about Rs 455.6 lakh crore in the previous session.
Vinod Nair, Head of Research, Geojit Investments said that valuation concerns and rising oil prices—driven by Middle East tensions, are fuelling risk aversion among investors. He added that adding to the uncertainty, the U.S. is considering unilateral tariff hikes on several key trading partners, with a decision expected within the next one to two weeks, ahead of an early July deadline.
Pranay Aggarwal, Director and CEO of Stoxkart said that weak global cues, particularly concerns around sticky US inflation data and the possibility of delayed interest rate cuts by the Federal Reserve, weighed heavily on investor sentiment. Domestically, markets saw profit booking across the board following the recent post-election rally. Key sectors such as banking, IT, and FMCG came under significant pressure, dragging the indices lower.
“Looking ahead, market participants are likely to remain cautious in the near term as they await clarity on global monetary policy direction and domestic macroeconomic data,” added Aggarwal.
In the Nifty50 pack, 43 stocks declined while only 7 advanced on Thursday. Tata Motors was the top loser, falling 2.98%, followed by Titan (-2.62%), Trent (-2.62%), Shriram Finance (-2.57%) and Coal India (-2.51%).
Meanwhile, gold is witnessing a fresh leg of safe-haven buying, amid escalating geopolitical and economic risks. Gold prices jumped Rs 850 to Rs 99,340 per 10 grams in the national capital on Thursday, according to the All India Sarafa Association. The yellow metal of 99.5% purity climbed Rs 800 to Rs 98,800 per 10 grams (inclusive of all taxes).