Stock market benchmarks — Sensex and the Nifty 50 — continued witnessing a strong selloff for the second consecutive session on Thursday, 23 April.
The 30-share pack crashed by 852 points, or 1.09%, to end at 77,664, while the NSE barometer Nifty 50 plunged 205 points, or 0.84%, to settle at 24,173.05.
Trent, Shriram Finance, and Tech Mahindra ended as the top losers in the Nifty index, falling 3-4%. On the other hand, Dr. Reddy’s Laboratories, Cipla, and Jio Financial Services ended as the top gainers in the index, rising 4-8%.
The sell-off was widespread as mid and small-cap segments also suffered losses. The Nifty Midcap 100 and Smallcap 100 indices declined by 0.41% and 0.67%, respectively.
The cumulative market capitalisation of BSE-listed firms dropped to slightly above ₹466 lakh crore from more than ₹469 lakh crore on 22 April, making investors poorer by about ₹3 lakh crore in a single session.
Over just two sessions, the Sensex has crashed 1,609 points, or 2%. And the Nifty 50 has also lost almost 2% in the same period.
What drove the stock market down?
According to experts, here are the key factors behind the selloff in the Indian stock market:
1. Poor show of banking, other heavyweights
Selloff in banking stocks, which hold significant weight in benchmarks, is one of the main reasons behind the sharp decline in the Sensex and the Nifty.
Nifty PSU Bank index crashed 2.19%, while the Private Bank index dropped 1.31%. The Nifty Bank index suffered a loss of 1.43%, and the Financial Services index declined 1.42%. HDFC Bank and ICICI Bank emerged among the top drags on the benchmarks.
Apart from them, the auto pack also suffered strong losses. The Nifty Auto index declined 2.35%.
Experts say investors are booking profits in heavyweights amid persisting uncertainties over the US-Iran conflict, which has raised the possibilities of earnings downgrades in FY27.
2. Crude oil again above $100
Brent Crude prices rose 2% to trade levels beyond $103 a barrel amid a fresh escalation of tensions between the US and Iran.
According to media reports, despite the ceasefire, the US military has intercepted at least three Iranian-flagged tankers in Asian waters, and Iran seized two ships in the Strait of Hormuz on Wednesday.
“A spike in crude oil prices is a main factor behind the selloff. Prices have again inched above the $100 mark and are sustaining, keeping market sentiment weak,” Ajit Mishra, SVP of Research at Religare Broking, said.
3. Uncertainty over a potential US-Iran final truce
Market participants are reacting to lingering uncertainties about the fate of the US-Iran conflict. Even though US President Donald Trump has extended the ceasefire with Iran for an indefinite period, some reports suggested that the US is not willing to extend the ceasefire beyond a few days.
Moreover, the timeline of talks is still not clear. The anticipated second round of peace talks between the two countries did not take place as neither side showed up for talks in Pakistan.
“With total uncertainty becoming the new normal, there is no clarity on the near-term direction of the market. With the duration of the war going beyond everyone’s initial expectations and the price of Brent crude bouncing back to $103, there is increasing risk to global growth in general and higher risk to India’s macros in particular,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
4. FII selling
After buying Indian equities for some days, foreign institutional investors (FIIs) have resumed selling Indian stocks in the cash segment. Over the last three sessions, they have sold Indian stocks worth more than ₹5,000 crore in the cash segment.
FIIs are largely selling in large-caps, and as per some experts, they are buying stocks in the mid and small-cap segments, which is supporting broader markets.
“A significant trend in the Indian market is the outperformance of the broader market, where there is no significant pressure from FII selling. In fact, FIIs are buying many stocks in the mid and small-cap segments. Therefore, this outperformance of the broader market is likely to continue,” said Vijayakumar.
5. Technical factor
According to Axis Securities, the Nifty 50 is currently hovering near the 61.8% Fibonacci retracement of the February–March 2026 decline. The market is consolidating at higher levels, and the next directional move will depend on developments in the US-Iran conflict.
Vikram Kasat, the head of advisory at PL Capital, said a decisive breakout and sustained movement above the 24,680 hurdle is required to extend the broader upward trend toward the next target of 24,900. If the market breaks below 24,300, it could trigger a deeper corrective move to fill the underlying gap zone down to 23,860, said Kasat.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
