Indian Stock Market Sees Significant Decline, Sensex Falls Over 500 Points and Nifty Drops Below 24,050

Market Sentiment Takes a Hit as Crude Oil Prices Rise and Foreign Fund Outflows Weigh In

The benchmark indices Sensex and Nifty traded lower around noon on Tuesday, weighed down by rising crude oil prices and continued foreign fund outflows. The Sensex witnessed volatile movement, swinging about 200 points between its intra-day high and low. It opened on a weak note but later climbed to a high of 77,493.53, while the broader Nifty opened lower and briefly slipped below the key 24,000 level to 23,999.25 before recovering to touch an intra-day high of 24,181.80.

At around noon, the Sensex was down about 450 points from the day's high, while the Nifty traded below the 24,050 mark. By 12:30 pm, the Sensex was down 343.16 points or 0.44 percent at 76,960.47, while the broader Nifty declined to 24,024.95, down 67.75 points or 0.28 percent.

The decline was led by ETERNAL, Axis Bank, and InterGlobe Aviation, which were down up to 4 percent. In contrast, Oil & Natural Gas Corporation and Coal India rose up to 4 percent. The drop in these stocks was attributed to profit booking, which saw both indices suffer losses after being on track to extend gains for a second consecutive session. Financial, IT, and realty stocks led the losses, with both Sensex and Nifty having snapped a three-session losing streak on Monday, led by gains in information technology stocks following the previous week's sharp decline.

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The rise in crude oil prices to USD 109.3 per barrel also weighed on market sentiment. Brent crude rose 0.99 percent, increasing import costs for India, widening the trade deficit, and putting pressure on inflation. This, in turn, impacts market sentiment.

Foreign Institutional Investors (FIIs) sold equities worth Rs 1,151.48 crore on Monday, reducing market liquidity and adding pressure on stock prices. The weak global cues, with Asian markets, including Japan's Nikkei 225, Shanghai's SSE Composite, and Hong Kong's Hang Seng trading lower, also contributed to the decline.

The geopolitical concerns, including uncertainty around the Strait of Hormuz and the cancellation of diplomatic engagements, also weighed on sentiment. The Reserve Bank of India's final asset-classification and provisioning norms, effective April 1, 2027, are expected to increase provisioning requirements for state-owned banks, leading to a decline in banking stocks.

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Anand James, Chief Market Strategist at Geojit Investments, suggested that the Nifty's pullback stalled near the 24,140 level, indicating that the index may still be within a bearish structure. A sustained move above 24,140 could open the way towards 24,421-24,470, but higher levels of 25,000-25,600 would need further confirmation.