A relentless wave of selling gripped the Indian equity markets during Thursday's trading session, forcing the benchmark indices to bleed heavily throughout the day. What began as a cautious opening quickly degenerated into a steep rout as trading progressed toward the closing bell. The benchmark Sensex sank by over 1,200 points, while the Nifty slipped well below the pivotal 23,100 mark. The downturn was notable for its sheer breadth, with virtually every major sectoral index surrendering to broad-based liquidation.
By the closing bell on September 24, the Sensex had shed 1,247.71 points, or 1.67%, to end at 73,580.54. Similarly, the Nifty tumbled 383.70 points, or 1.64%, settling at 23,063.10. Market breadth heavily favored decliners, with roughly 1,400 stocks advancing against 2,772 declining counters. Among individual components on the Nifty, leading losers included Bajaj Finance, HDFC Life, Bajaj Finserv, Axis Bank, and InterGlobe Aviation. Defying the widespread rout, Cipla and NTPC managed to swim against the tide and close in the green.
Broad Sectoral Losses Across the Board
Selling pressure reverberated through every segment of Dalal Street, leaving all key sectoral gauges in the red. Banking and financial services faced severe heat, dragging the Nifty Private Bank index down by 2.2%, while the broader Bank index dropped 1.7%. The Metal index witnessed a 1.9% decline, whereas Auto and Infrastructure shed 1.5% each. The Oil and Gas gauge retreated by 1.3%. Wider market sentiment remained equally bruised, as mid-cap counters registered a drop of nearly 2% and small-cap stocks fell 1.5%.
Key Catalysts Behind the Market Plunge
A convergence of global headwinds drove the market downturn, led primarily by a sharp surge in US sovereign bond yields. The 10-year US Treasury yield escalated to levels not seen since 2007, while the 2-year yield crossed above 4.9%. Surging bond yields significantly elevate the appeal of low-risk fixed-income instruments. In response, global portfolio managers routinely reallocate capital away from equities and into debt assets, putting intense liquidation pressure on stock markets worldwide.
Simultaneously, lingering anxiety over monetary policy weighed on market participants. Following robust economic activity readings in the United States, concerns mounted that the US Federal Reserve would maintain a restrictive and hawkish posture on interest rates. This prospect of prolonged higher borrowing costs dampened risk appetite across global financial centers and directly impacted domestic bourses.
Adding further fuel to the fire was an unsettling spike in crude energy costs. Oil prices resumed their upward climb, trading above 102 dollars per barrel. Escalating diplomatic frictions between the United States and Iran, alongside tense developments surrounding the Strait of Hormuz, stoked serious fears of energy supply disruptions. Because elevated energy costs aggravate domestic trade balances and inflation risks, equity investors adopted a decidedly defensive stance.
