BY Our Business Correspondent
Indian equity markets extended their losing streak for a fourth consecutive session on Thursday, with the benchmark Sensex declining 417 points and the Nifty 50 closing below the psychologically important 23,900 level. The sell-off was concentrated in information technology, automobile, pharmaceutical and select heavyweight stocks, although gains in banking, realty and several mid- and small-cap counters limited the damage.
The BSE Sensex fell 417.49 points, or 0.55%, to 76,152.86, while the Nifty 50 declined 41 points, or 0.17%, to 23,873.45. Both benchmarks surrendered early gains and finished at or close to their session lows. Over the past four trading sessions, the Sensex has lost 1.44%, while the Nifty has declined 1.25%.
The relatively modest fall in the Nifty masked significant intra-day volatility. The index opened at 23,997.95 and moved above 24,000 during early trading, touching 24,025.40. However, buying momentum failed to sustain. The index slipped below 23,950 around noon and remained under pressure through the afternoon before selling intensified towards the close. It eventually touched 23,873.45 and ended at that level.
The Sensex followed a similar pattern. It opened higher and reached an intra-day high of 76,924.48 before reversing course. The index subsequently weakened steadily and ended at 76,152.86. The late-session decline was particularly important for traders as Thursday also saw expiry-related volatility and sharp movements during the newly introduced closing-auction phase. Reuters reported that premiums on some Sensex put options surged sharply during the closing auction, highlighting the heightened volatility around the final minutes of trading.
IT, Auto and Pharma Stocks Under Pressure
The day’s selling was led by technology and automobile shares. Tech Mahindra emerged as the biggest Nifty laggard, while Cipla, Bajaj Auto and Mahindra & Mahindra were among the other significant losers. Moneycontrol identified Tech Mahindra, Cipla, Bajaj Auto and M&M among the major Nifty decliners.
Among individual heavyweights, Mahindra & Mahindra fell 1.25%, Infosys declined 0.85% and Reliance Industries slipped 0.81%, making them notable drags on the benchmark.
The Nifty IT index declined about 0.85%, with technology stocks including Tech Mahindra, HCL Technologies, Infosys and Tata Consultancy Services coming under pressure. Pharma stocks also weakened, while FMCG shares faced selling pressure.
The weakness in IT stocks came despite a positive overnight performance on Wall Street, suggesting that domestic factors, valuation concerns and sector-specific profit-taking were more influential during the session.
Banks, Realty Cushion Market
Banking stocks provided an important counterweight to the broader selling pressure. The Nifty Bank index gained around 0.36%, while private and PSU banking indices also remained in positive territory.
Adani Ports, Axis Bank, HDFC Bank, Bharat Electronics and Asian Paints figured among the leading Nifty gainers, according to market data.
Realty stocks were particularly strong, with the Nifty Realty index gaining around 2.5%. The media index also advanced about 1.7%, while PSU banks and private banks recorded gains of around 0.5%. In contrast, IT, FMCG and pharma indices declined by roughly 0.5% each.
The divergence between the headline indices and the broader market was therefore notable. While large-cap benchmarks remained weak, investors continued to find opportunities in selected mid- and small-cap stocks.
The BSE MidCap index rose 0.15%, while the BSE SmallCap index advanced 1.01%. Other market measures also indicated relative resilience outside the benchmark-heavy large-cap universe.
Top Gainers and Losers
Among Nifty 50 stocks, Adani Ports led the gainers, followed by Axis Bank, HDFC Bank, Bharat Electronics and Asian Paints. On the losing side, Tech Mahindra was the biggest laggard, with Cipla, Bajaj Auto and Mahindra & Mahindra also among the prominent decliners.
The broader market also produced several sharp individual moves. Autoline Industries surged 10.42%, while XTGlobal Infotech gained 5.11%, Titan Biotech rose 4.91%, RBL Bank advanced 4.80% and Inox Wind climbed 4.83%.
At the other end, Balu Forge Industries declined 1.42%, despite announcing a significant capacity expansion through the acquisition of a ring-rolling production line.
Crude Oil Remains a Major Market Risk
Investors continued to monitor developments in the Middle East closely. Elevated crude oil prices remain a particular concern for India because the country imports a substantial proportion of its crude requirements.
Brent crude for November 2026 delivery rose $1.21, or 1.27%, to $96.84 a barrel in the commodities market. Rising oil prices have the potential to increase India’s import bill, put pressure on the rupee and complicate the inflation outlook.
For equity investors, the combination of expensive crude, geopolitical uncertainty and elevated global bond yields has created a difficult environment for risk assets. A sustained rise in oil prices could also affect corporate margins, particularly for transportation, automobile, chemicals and other energy-intensive industries.
RBI Forex Scheme Draws $136.38 Billion
One of the most significant developments on the economic front was the Reserve Bank of India’s disclosure that foreign-exchange inflows mobilised under its special USD-INR swap facility had reached $136.38 billion as of August 31, 2026.
According to provisional data submitted by authorised dealer banks, FCNR(B) deposits accounted for $127.23 billion, while overseas foreign-currency borrowings contributed $5.26 billion and external commercial borrowings added $3.89 billion.
The scale of the inflow has materially increased liquidity in India’s banking system. Reuters reported on Thursday that India’s banking-system liquidity surplus had reached a record level, with rupee liquidity exceeding the previous post-pandemic peak. The development gives the banking system greater liquidity but also creates a challenge for the RBI in managing short-term interest rates and absorbing excess funds when necessary.
The forex facility was introduced by the RBI in June to attract foreign-currency resources and strengthen external-sector liquidity. While the FCNR(B) window closed on August 31, facilities covering ECBs and OFCBs continue until December 31.
For financial markets, the development is significant because stronger foreign-currency mobilisation can improve India’s external buffers and provide additional stability during periods of global financial-market stress. At the same time, the associated rupee liquidity requires careful monetary management.
Foreign Investors Turn More Positive
Foreign portfolio investor activity also offered some encouragement. FPIs invested approximately $3.1 billion in Indian equities during August, according to the market data cited in the report, marking their strongest monthly inflow in nearly two years.
The improvement in foreign investor flows is important because sustained FPI participation can support large-cap stocks and the rupee. However, investors remain sensitive to US interest-rate expectations, crude oil prices and geopolitical developments.
The simultaneous presence of strong foreign-currency inflows and continued FPI interest provides some support to India’s external position even as equity benchmarks remain under pressure.
Rupee, Bonds and Gold
In currency trading, the rupee strengthened modestly against the US dollar. The partially convertible rupee was quoted around 94.5900 per dollar, compared with 94.7300 in the previous session.
The movement came despite elevated crude prices, which ordinarily put pressure on the Indian currency through a higher import bill.
The yield on India’s benchmark 10-year government security eased to 6.964% from 6.972%, indicating modest demand for government bonds. The US 10-year Treasury yield also declined, to around 4.785%.
Gold remained firm amid geopolitical uncertainty. MCX gold futures for October 5 delivery gained 0.74% to ₹1,53,533. The US Dollar Index weakened 0.32% to 99.24.
Services Sector Shows Gradual Improvement
India’s private-sector activity continued to expand in August, although the overall pace remained subdued.
The HSBC Composite PMI stood at 54.3 in August, unchanged from July but below the preliminary estimate of 54.6. The reading indicates continued private-sector expansion, although the pace was among the weakest recorded in around four-and-a-half years.
The services sector performed somewhat better. The HSBC India Services PMI rose to 54.1 in August from 53.3 in July, supported by stronger demand and an increase in new business. Nevertheless, the expansion remained relatively weak compared with the long-term trend.
The PMI data suggest that India’s domestic economy continues to expand but is losing some momentum. For investors, this creates a mixed picture: domestic demand remains supportive, but the pace of improvement is not strong enough to completely offset concerns arising from global uncertainty.
Global Markets Recover
Global equity markets were comparatively supportive overnight. Wall Street recovered on Wednesday, with the Dow Jones Industrial Average gaining 295.01 points, or 0.56%, to 53,061.89. The S&P 500 rose 35.16 points, or 0.46%, to 7,666.63, while the Nasdaq Composite advanced 118.05 points, or 0.45%, to 26,217.83.
The US rebound was supported by buying in technology stocks and other recent underperformers.
However, US labour-market data remained a major focus. Private-sector employment increased by only 38,000 jobs in August, below market expectations and July’s revised increase. The weaker employment reading has implications for Federal Reserve policy expectations.
Investors are now awaiting the US non-farm payrolls report, due Friday, which could provide a clearer indication of the health of the American labour market and influence expectations for the Federal Reserve’s September policy decision.
In Europe, producer prices in the eurozone increased 1.6% month-on-month in July, with energy prices rising sharply. The development adds another layer of uncertainty to the global inflation outlook.
Stocks in Focus
Several corporate announcements generated significant stock-specific action.
RBL Bank gained 4.80% after announcing that its board will meet on September 7 to consider establishing a Euro Medium Term Note programme. The programme could enable the bank to raise foreign-currency debt through one or more tranches, subject to market conditions and regulatory requirements.
Titan Biotech advanced 4.91% after its board approved a 1:4 bonus issue, subject to shareholder approval.
Welspun Corp rose 4.26% after a foreign brokerage initiated coverage with a ‘Buy’ recommendation and a target price of ₹3,250.
XTGlobal Infotech gained 5.11% after being selected as a qualified technology partner under a multi-year cloud engineering and technical-services programme for a US state government technology authority. The framework could run for up to five years, with the company estimating the aggregate addressable opportunity across the qualified vendor pool at $50 million-$100 million.
Inox Wind advanced 4.83% after securing a repeat turnkey order from Indian Oil Corporation for a 100-MW wind-power project valued at approximately ₹755 crore.
HUDCO rose 1.49% after signing an MoU with the Bihar government for financing proposed industrial parks. Under the agreement, HUDCO would provide financial assistance of up to ₹25,000 crore over five years for industrial infrastructure, including land acquisition.
Autoline Industries was the day’s standout broader-market performer, surging 10.42% after securing a new business award from Tata Motors Passenger Vehicles for critical components for SUV applications. The company expects the programme to generate incremental annual revenue of approximately ₹100 crore.
Lumino Industries Makes Strong Market Debut
The primary market also remained active. Lumino Industries made a strong debut, listing at ₹109 on the BSE, a 32.93% premium over its issue price of ₹82. The stock subsequently touched ₹119 before ending at ₹110.39, representing a 34.62% premium.
The company raised ₹700 crore through its public issue. Market data showed heavy trading activity, with more than 1.59 crore shares changing hands on the BSE.
The strong listing indicates continued appetite for select new-age and manufacturing-related offerings even as secondary-market sentiment remains cautious.
IPO Subscription Remains Strong
The primary market continued to attract substantial investor participation.
Rays of Belief’s ₹125-crore IPO received bids for nearly 33.8 crore shares against 31.38 lakh shares on offer, resulting in subscription of about 107.7 times by the close of bidding on September 3. Non-institutional investors showed particularly strong demand.
Deepa Jewellers’ ₹460-crore IPO also attracted strong interest, with the issue subscribed approximately 42.6 times by the final day. The issue carried a price band of ₹168-177 a share and opened on September 1.
Both issues are scheduled to proceed towards allotment and listing in the coming days, keeping the primary market firmly in focus.
Market Outlook
Thursday’s decline reinforced the cautious tone prevailing in Indian equities. The Nifty’s inability to sustain the 24,000 level, combined with continued selling in IT, auto and pharmaceutical stocks, suggests that investors are unwilling to aggressively increase exposure to large-cap equities until some of the major global uncertainties ease.
At the same time, the resilience of banking, realty, mid-cap and small-cap shares indicates that domestic liquidity remains supportive and that investors continue to rotate capital rather than exit the market altogether.
The immediate triggers will include crude oil prices, developments in the US-Iran conflict, US non-farm payrolls, Treasury yields, foreign-investor flows and currency movements. A sustained decline in crude and softer US yields could provide relief to Indian equities. Conversely, another sharp rise in oil prices or renewed geopolitical escalation could intensify pressure on the rupee, inflation expectations and equity valuations.
For now, the market remains divided between strong domestic liquidity and foreign-currency mobilisation on one side, and global risk factors, elevated crude prices and sector-specific profit-taking on the other. The coming sessions are therefore likely to remain volatile, with stock-specific opportunities continuing to coexist with broader market caution.
Disclaimer: This report is based entirely on market data, exchange filings, and corporate disclosures for informational purposes only and does not constitute financial or investment advice.
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