Indian equity markets took a heavy beating on Wednesday as a wave of global pessimism swept across Dalal Street, wiping out over Rs 2.5 lakh crore in investor wealth. The benchmark BSE Sensex nosedived over 800 points, closing below the 80,300 mark, while the Nifty 50 slipped beneath the 24,550 level, led by sharp declines in IT, banking, and financial stocks.
The day’s fall was a consequence of a perfect storm of negative cues—global risk aversion, rising US treasury yields, weakness in tech-heavy sectors, and persistent selling by foreign institutional investors (FIIs).
Global Headwinds Rattle Markets
At the heart of the global selloff was the growing concern over the U.S. fiscal position and debt sustainability. Moody’s recently issued a warning on the U.S. sovereign credit rating, while the yield on 10-year U.S. Treasuries surged past 4.5%, prompting investors to move away from risky assets like equities.
This risk-off sentiment spilled into emerging markets, with India bearing the brunt due to its high correlation with global capital flows. Other Asian markets also remained in the red, adding to the negative sentiment.
IT & Financials in the Crosshairs
The market rout was led by IT majors like TCS, Infosys, and Wipro, which corrected between 2–3% intraday. These companies are particularly vulnerable to global volatility, given their large exposure to U.S. and European clients. Additionally, banking heavyweights such as HDFC Bank, ICICI Bank, and Axis Bank also saw notable declines amid rising bond yields and concerns over interest rate uncertainty.
The Nifty IT and Nifty Bank indices fell over 2%, acting as major drags on the broader market.
FIIs Hit the Exit Button
FIIs continued their cautious stance, pulling out Rs 2,500 crore from Indian equities in today’s session alone. This marks the third consecutive session of net selling by foreign investors. The outflows have intensified as U.S. interest rates stay elevated, reducing the relative attractiveness of emerging market equities.
D-Street veterans believe this FII exodus is partly tactical, driven by short-term global concerns, but it has increased pressure on frontline stocks.
Volatility Back on the Rise
India VIX, the market’s fear gauge, spiked over 3% to touch 18.04, signaling heightened nervousness among traders and institutions. Market participants have turned defensive, with midcaps and smallcaps also facing profit-booking after a strong rally over the past few months.
Analyst Take
According to analysts, the correction may be healthy in the longer run but could extend further if global headwinds persist. "This is not a domestic story. India’s macros are solid, but sentiment is being dictated by international triggers. Until global yields stabilize and FII selling moderates, volatility will stay high," said an equity strategist at a leading brokerage.
Conclusion
With foreign investors pulling out, global risks rising, and sectoral heavyweights under pressure, Dalal Street may remain choppy in the near term. Traders are advised to remain cautious and avoid aggressive bets until clarity emerges on global fiscal and rate policy fronts.
Written by Indira Securities SEBI Registered with 30 plus years of experience in Stock Market!!!