Stock Market Crash Today: Sensex Nears 71,800, Nifty Falls Over 1%; Know 5 Reasons Behind The Sell-Off

Indian stock markets came under heavy selling pressure on Thursday, October 8, with the Sensex plunging nearly 800 points and the Nifty 50 falling more than 1% as investors turned cautious amid rising crude oil prices, tighter RBI policy signals and continued foreign fund outflows.

Stock Market Crash Today: Sensex Plunges Around 800 Points, Nifty Takes Sharp Hit

By 12:26 pm, the Sensex was trading at 71,855.63, down 783.07 points, while the Nifty stood at 22,319.65, lower by 283.40 points. The sell-off came after both indices opened lower and intensified through the morning session, with heavyweight stocks across energy, infrastructure and other sectors dragging the benchmarks lower.

Why Is Stock Market Falling Today? Check Key Factors Behind Decline

The sharp decline in Indian stocks comes as investors contend with several concerns at the same time. The Reserve Bank of India's change in policy stance, elevated global bond yields, a surge in crude oil prices and persistent foreign institutional investor selling have combined to weaken market sentiment.

The concern for investors extends beyond a single negative trigger. Higher borrowing costs, expensive crude, a weaker rupee and sustained foreign outflows could keep liquidity and valuations under pressure, particularly for large-cap stocks that have faced continued selling in recent sessions.

Among Sensex constituents, ITC, Adani Ports, IndiGo, Power Grid and Reliance Industries were among the major laggards, falling as much as 4% during intraday trade. On the other hand, Titan and major IT stocks including Tech Mahindra, HCL Technologies, TCS and Infosys gained up to 2%, providing some support to the benchmark indices.

RBI Rate Hike And Policy Stance Add To Market Pressure

The RBI's latest policy signal emerged as one of the key domestic factors weighing on equities. The central bank raised the repo rate by 25 basis points to 5.5% from 5.25% and changed its policy stance from "neutral" to "calibrated tightening".

The rate increase was the first in nearly four years and was largely anticipated by the market. However, the shift in stance caught investors off guard and raised concerns that monetary policy could remain restrictive for longer.

"Indian equities are likely to remain cautious as the RBI's shift towards a interest rate tightening cycle, while the rupee weakened 0.4% to ₹96.7/US$, close to a record low. The RBI raised the repo rate by 25bp to 5.5% from 5.25%, its first hike since February 2023, and shifted its stance from neutral to calibrated tightening. While the rate hike was largely anticipated, the change in stance was unexpected and triggered a negative market reaction," said By Siddhartha Khemka - Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.

Crude Oil Crosses $102 As Middle East Risks Rise

The rise in crude oil prices has added another layer of pressure for Indian equities. Brent crude gained another 2% and moved above $102 per barrel as markets continued to monitor supply risks linked to the Middle East.

Oil supply concerns intensified following further attacks on shipments in the Gulf and around the Strait of Hormuz. Tankers using the strategic route reportedly faced the highest number of attacks in a single week since the Iran war began earlier this year.

FII Selling Adds To Sensex, Nifty Pressure

Foreign institutional investor selling remains another major drag on Indian equities. Provisional exchange data showed that FIIs net sold shares worth more than Rs 6,121 crore on Wednesday. Their selling over nine consecutive sessions has reached nearly Rs 57,000 crore, keeping sustained pressure on large-cap stocks.

Nifty Outlook Ahead: BofA Turns Positive On Indian Stock Market, Sees Nifty50 At 26,200

Despite the sharp near-term correction, BofA Securities has turned constructive on Indian equities after almost two years of caution. The brokerage expects the Nifty to reach 26,200 by the end of the year, implying potential upside of around 15-16% from the levels referenced in its assessment.

Arbind Maheswari, Head of India Equities at BofA Securities, said the change in view is not based on a single market trigger. Instead, the brokerage sees a combination of improving corporate earnings, more reasonable valuations and resilient domestic economic growth creating a more favourable setup for Indian equities.

Earnings Growth Could Support Indian Stocks

BofA Securities expects Indian companies to deliver 10-15% earnings growth during the current fiscal year. The brokerage also sees the possibility of earnings upgrades after the September quarter results, particularly if companies report stronger revenue growth and maintain margins despite cost and interest-rate pressures.

The brokerage expects earnings growth of around 18% in the September quarter, compared with 12% in the previous quarter. It currently forecasts earnings growth of 10% for 2026-27 and 15% for 2027-28.

For investors, the earnings outlook could become an important counterbalance to the near-term pressure from crude oil, bond yields and foreign fund outflows. If September quarter results lead to stronger earnings estimates, upgrades could provide support to stock valuations even as global uncertainty continues.

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