Our Business Correspondent
Indian equity markets came under intense selling pressure on Wednesday, with the benchmark Sensex plunging more than 800 points and the Nifty slipping below the 23,450 level as a sharp rise in crude oil prices aggravated concerns over inflation, economic growth and corporate profitability. Persistent geopolitical uncertainty, renewed foreign institutional selling and weakness in the rupee further dampened investor sentiment.
The sell-off marked the third consecutive session of losses for the domestic benchmarks. Liquidity conditions were also affected by the ongoing primary-market activity, with multiple initial public offerings (IPOs) open for subscription and attracting investor funds that might otherwise have flowed into the secondary market.
The S&P BSE Sensex declined 813.35 points, or 1.08 per cent, to close at 74,764.23, while the Nifty 50 fell 203.60 points, or 0.86 per cent, to 23,431.50. Over the past three trading sessions, the Sensex has lost 2.29 per cent, while the Nifty has declined 1.95 per cent.
The selling was broad-based, although the technology and FMCG segments bore the brunt of the pressure. Infosys, HDFC Bank and Reliance Industries emerged among the biggest drags on the Nifty. Infosys fell 4.34 per cent, HDFC Bank declined 2.26 per cent and Reliance Industries slipped 1.23 per cent.
The broader market also weakened, though the decline was less severe than in the frontline indices. The BSE 150 MidCap Index dropped 0.33 per cent, while the BSE 250 SmallCap Index declined 0.50 per cent. Market breadth remained distinctly negative, with 1,877 stocks advancing against 2,498 declining on the BSE, while 234 shares closed unchanged.
Investor anxiety was reflected in the volatility gauge as well. The India VIX jumped 6.32 per cent to 11.94, signalling a rise in expectations of near-term market volatility.
Oil Crosses $100, Inflation Concerns Intensify
Crude oil remained the central source of concern for investors. Brent crude for November 2026 settlement rose $2.77, or 2.83 per cent, to $100.69 a barrel, crossing the psychologically important $100 threshold.
For India, sustained crude prices at elevated levels pose a significant macroeconomic challenge because higher energy costs can increase inflationary pressures, widen the import bill and place additional pressure on the rupee. They can also squeeze margins for oil-consuming sectors and reduce disposable income if higher fuel and transportation costs feed into the broader economy.
The latest spike in crude prices was linked in the report to attacks on Saudi energy infrastructure by Iran-backed Houthi militants and further military escalation involving the United States and Iran. The worsening geopolitical environment has heightened fears that disruption to energy supplies could keep oil prices elevated for an extended period.
The report said the geopolitical situation intensified further after the United States stated that its forces had destroyed five Iranian oil tankers following an attempted attack on a US Navy vessel. The US Treasury also announced fresh sanctions targeting Iran’s aviation sector, increasing pressure on Tehran.
Rupee Weakness Adds to Pressure
The domestic currency also weakened during the session. The partially convertible rupee was hovering at 95.1175 against the US dollar, compared with its previous close of 94.7450. The combination of a weaker rupee and expensive crude presents an additional challenge for India’s external balance because a depreciating currency makes dollar-denominated imports more expensive.
The rise in oil prices was also reflected in India’s bond market. The yield on the 10-year benchmark government security increased to 6.954 per cent from 6.944 per cent, indicating some upward pressure on borrowing costs.
Gold, meanwhile, continued to attract demand amid market uncertainty. MCX Gold futures for October 5, 2026 settlement rose 0.39 per cent to Rs 1,53,106. The US Dollar Index edged up 0.04 per cent to 98.83, while the US 10-year Treasury yield advanced to 4.810 per cent.
Global Markets Under Pressure
Global markets provided little relief to domestic investors. European equities declined, while Asian markets ended mixed as Brent crude moved above $100 a barrel, raising fears of a prolonged stagflationary shock.
In the United States, Wall Street closed lower on Tuesday. The Dow Jones Industrial Average fell 1.18 per cent to 52,786.07, the S&P 500 declined 0.58 per cent to 7,673.52, and the Nasdaq Composite dropped 0.32 per cent to 26,421.41. The US 10-year Treasury yield remained close to 4.8 per cent.
Markets are now closely watching US inflation data, with the August Consumer Price Index scheduled for release later in the week. The data is expected to provide important clues about the Federal Reserve’s interest-rate strategy ahead of its September 16-17 policy meeting.
According to the report, markets were pricing in roughly a 60 per cent probability of a rate hike next week. Rising crude prices have complicated the inflation outlook and could restrict the ability of major central banks to ease monetary policy.
IT Stocks Lead Decline
Technology stocks were among the biggest casualties of the session. The Nifty IT index fell 3.24 per cent to 28,913.95, extending its losing streak to six sessions. During this period, the index has declined 8.20 per cent.
Coforge dropped 5.38 per cent after its chairman and independent director Om Prakash Bhatt resigned following concerns raised by an internal audit regarding the board evaluation process.
Other major IT stocks also witnessed heavy selling. Infosys fell 4.34 per cent, HCL Technologies 3.70 per cent and Tech Mahindra 3.27 per cent. Wipro declined 2.62 per cent, Persistent Systems 2.54 per cent, TCS 2.11 per cent, Mphasis 2.02 per cent, Oracle Financial Services Software 1.27 per cent and LTIMindtree 0.41 per cent.
Strong US jobs data and higher inflation expectations have strengthened expectations of tighter monetary policy, pushing US bond yields higher. This environment is particularly challenging for technology companies because higher rates can pressure valuations while concerns over global economic growth may weigh on technology spending.
Adani Enterprises, Paytm Buck Trend
Despite the broad market sell-off, several stocks bucked the negative trend.
Adani Enterprises gained 5.13 per cent after its subsidiary, Adani Airport Holdings, entered into binding agreements to raise Rs 9,825 crore, or about $1 billion, in primary equity capital from a consortium comprising Alpha Wave Global, Premji Invest, Temasek and BlackRock.
The funds are expected to support airport modernisation and capacity expansion aimed at serving around 200 million passengers annually. The company also plans to develop an integrated Adani Airport City, with approximately 22 million square feet of mixed-use development in the first phase, besides expanding its ground-handling and non-aeronautical businesses.
One 97 Communications, the parent of Paytm, rose 4.88 per cent after a block deal in early trade. The stock touched a fresh 52-week high of Rs 1,758.90, with around 10.6 lakh shares reportedly changing hands. The stock also benefited from reports that Paytm is exploring a new artificial-intelligence business to support revenue growth.
Graphite, Telecom and Infrastructure Stocks in Focus
Graphite-related stocks also attracted strong buying interest. Graphite India surged 14.81 per cent, while HEG advanced 1.74 per cent after US-based graphite electrode manufacturer GrafTech International announced a minimum 30 per cent increase in graphite electrode prices.
Sterlite Technologies hit the 5 per cent upper circuit at Rs 865.90, marking its fourth consecutive session of gains. The stock has risen 21.40 per cent in four sessions. The company recently received approval for a major expansion of its existing manufacturing facility and plans to increase installed manufacturing capacity by approximately 50 per cent by FY29, with an investment of around Rs 3,000 crore.
Larsen & Toubro declined 0.60 per cent despite announcing that its hydrocarbon business had secured a large offshore order from ONGC for additional development of the Ratna-I and NLM-14 projects off India’s western coast. The company classifies the contract in the Rs 2,500 crore to Rs 5,000 crore range.
Power Mech Projects rose 0.32 per cent after securing a Rs 970 crore operations and maintenance contract from Vedanta Power for its Sakti Thermal Plant in Chhattisgarh.
Enviro Infra Engineers gained 4.13 per cent after its step-down subsidiary, Suyog Urja, received an Rs 189.99 crore contract from Tata Power Renewable Energy for execution of a 180 MW NTPC wind power project at Parli in Maharashtra.
IPO Market Remains Busy
The primary market continued to remain active, with several IPOs attracting substantial investor interest even as secondary-market sentiment deteriorated.
Pranav Constructions emerged as the strongest subscription story among the issues listed in the report. By 4:45 pm on September 9, the issue had received bids for 2,71,24,34,520 shares against 2,24,63,137 shares on offer, translating into a subscription of 120.75 times. The issue, which opened on September 7, carries a price band of Rs 118-124 per share and closes on September 9.
Kanohar Electricals was subscribed 9.56 times, while Glass Wall Systems (India) received subscriptions equivalent to 8.15 times the shares on offer. Prasol Chemicals, meanwhile, had been subscribed 0.72 times by the reported cut-off.
Other issues showed mixed investor response. LCC Projects was subscribed 1.31 times and Karamtara Engineering 1.26 times. In contrast, Asset Reconstruction Company (India) was subscribed only 0.36 times, Steamhouse India 0.40 times and Manipal Payment and Identity Solutions 0.17 times. Rentomojo recorded subscription of 1.35 times.
The divergence in IPO subscription levels highlights selective investor appetite in the primary market despite weakness in the broader equity market.
Outlook
With crude oil now above the $100-a-barrel threshold, investors are likely to remain focused on the impact of energy prices on inflation, the rupee, interest rates and corporate earnings. The next major triggers will include US inflation data, global central-bank policy signals, developments in the Middle East and foreign portfolio flows.
For Indian equities, the combination of elevated oil prices, currency weakness, global rate uncertainty and continued foreign selling represents a challenging near-term environment. At the same time, strength in selected infrastructure, energy, graphite, airport and renewable-energy-linked stocks suggests that investors continue to differentiate between companies based on sector-specific prospects and earnings visibility.
The market’s immediate direction is therefore likely to remain closely tied to developments in crude oil and global monetary policy, while domestic investors will continue to monitor both the secondary market and the unusually active IPO pipeline.
Disclaimer: Stock market investments are subject to market risks. Please consult with a certified financial advisor before making any investment decisions.