Last Updated:
Sensex and Nifty fell sharply in late trade amid MSCI index rebalancing, heavy FII selling and weak global cues linked to West Asia tensions and rising crude oil prices
Indian stock markets witnessed a sharp sell-off in the final hour of trade on Thursday, (May 29) with the Sensex and Nifty plunging after 3 pm
Indian stock markets witnessed a sharp sell-off in the final hour of trade on Thursday, with the Sensex and Nifty plunging after 3 pm amid heavy foreign fund outflows, MSCI index rebalancing and weak global cues linked to rising tensions in West Asia.
The BSE Sensex crashed over 900 points during the late-session slide before recovering some losses to close lower by around 700 points. The NSE Nifty also slipped sharply below key psychological levels as investors rushed to book profits.
Market experts said the sudden fall was largely triggered by MSCI’s semi-annual index rebalancing, which led to large-scale selling by foreign institutional investors (FIIs). Passive funds tracking the MSCI indices adjusted their portfolios before the closing bell, resulting in heavy volatility during the final minutes of trade.
Weak global sentiment also weighed on markets amid concerns over escalating tensions involving Iran and fears of possible disruptions in crude oil supply. Rising oil prices added to investor nervousness as higher crude costs could impact inflation and India’s import bill.
Analysts said banking, IT and financial stocks saw intense selling pressure during the late-session rout. Broader markets also came under pressure, with several midcap and smallcap stocks declining sharply.
Despite the sharp correction, experts said the fall was driven more by technical and global factors rather than any major weakness in domestic economic fundamentals. They added that market volatility could continue in the near term due to global uncertainties and foreign investor activity.
Read More