The Indian stock market witnessed a sharp decline on Wednesday, with the BSE Sensex plummeting 833 points to close at 74,405. The broader Nifty 50 index also fell below the crucial 22,500 mark, ending the session at 22,458, down 265 points. The sell-off was broad-based, with losses led by banking, metal, and IT stocks.
Rupee Hits Record Low
The Indian rupee weakened to an all-time low of 87.95 against the US dollar, breaching the previous record of 87.90. The currency's decline was driven by sustained foreign fund outflows and a strong dollar index. The Reserve Bank of India (RBI) is believed to have intervened through state-run banks to prevent further depreciation, but the pressure remained intense.
Market Drivers
Investor sentiment was rattled by global cues, including a sell-off in US markets and rising geopolitical tensions. Foreign portfolio investors (FPIs) have been net sellers in Indian equities for the past few sessions, pulling out over ₹5,000 crore in February so far. Additionally, concerns over domestic inflation and a potential delay in interest rate cuts by the RBI weighed on market mood.
- Sensex: Down 833 points (1.1%) to 74,405
- Nifty: Down 265 points (1.2%) to 22,458
- Rupee: Fell to 87.95 per dollar (record low)
- FPI Outflows: Over ₹5,000 crore in February
Sectoral Impact
All sectoral indices ended in the red. The Nifty Bank index dropped 1.5%, led by losses in HDFC Bank and ICICI Bank. The Nifty Metal index fell 2.3% on weak global demand outlook, while IT stocks declined 1.8% amid fears of a slowdown in the US economy. The broader market also witnessed selling pressure, with the BSE Midcap and Smallcap indices falling 1.3% and 1.6%, respectively.
Market experts attribute the sharp fall to a combination of global and domestic factors. "The rupee's record low and persistent FII selling have dented investor confidence. The market is also pricing in the possibility of a prolonged tight monetary policy by the RBI," said Vinod Nair, Head of Research at Geojit Financial Services.
The volatility index, India VIX, surged 8% to 15.2, indicating heightened uncertainty among traders. Technical analysts suggest that the Nifty may find support at the 22,200 level, while resistance is placed at 22,700.
