Sensex Drops 1,600 Points in Two Days, Nifty 50 Falls Below 24,150: Factors Behind Market Decline

Indian Stock Market Witnesses Selloff for Second Consecutive Session

The Indian stock market benchmarks, Sensex and the Nifty 50, continued to witness a strong selloff for the second consecutive session on Thursday, 23 April. In intraday trade on Thursday, the 30-share pack crashed by more than 850 points, or 1%, while the NSE barometer Nifty 50 plunged 1% to the day's low of 24,135.

The mid and small-cap segments, however, continued their outperformance. The Nifty Midcap 100 and Smallcap 100 indices declined by up to half a per cent during Thursday's session after closing higher on Wednesday. Over the just two sessions, the Sensex has crashed nearly 1,600 points, or 2%. The Nifty 50 has also lost almost 2% over the two days.

The key factors behind the selloff in the Indian stock market benchmarks are attributed to several factors. Firstly, the poor show of banking and other heavyweights has been a major reason behind the sharp decline in the Sensex and the Nifty. The Nifty Bank, Private Bank, PSU Bank, and Financial Services indices fell more than 1% during the session. HDFC Bank, ICICI Bank, Bajaj Finance, and Kotak Mahindra Bank were among the key drags on the headline indices.

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Apart from banking stocks, the auto pack also suffered strong losses. The Nifty Auto index declined more than 2% during the session. Experts say investors are booking profits in heavyweights amid persisting uncertainties over the US-Iran conflict, which has raised the possibilities of earnings downgrades in FY27.

Another major factor driving the selloff is the rise in crude oil prices, which have again inched above the $100 mark and are sustaining, keeping market sentiment weak. Brent Crude prices rose more than 1% to trade levels beyond $103 a barrel amid a fresh escalation of tensions between the US and Iran.

The uncertainty over a potential US-Iran final truce is also contributing to the market's volatility. Even though US President Donald Trump has extended the ceasefire with Iran for an indefinite period, some reports suggested that the US is not willing to extend the ceasefire beyond a few days. Moreover, the timeline of talks is still not clear.

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Foreign institutional investors (FIIs) have also resumed selling Indian stocks in the cash segment after buying Indian equities for some days. Over the last three sessions, they have sold Indian stocks worth more than ₹5,000 crore in the cash segment. FIIs are largely selling in large-caps, and as per some experts, they are buying stocks in the mid and small-cap segments, which is supporting broader markets.

According to Axis Securities, the Nifty 50 is currently hovering near the 61.8% Fibonacci retracement of the February–March 2026 decline. The market is consolidating at higher levels, and the next directional move will depend on developments in the US-Iran conflict.