Domestic benchmark indices ended sharply lower on Wednesday as heavy selling in financial, auto and IT stocks dragged the market down, with investors remaining cautious amid persistent foreign fund outflows.
The BSE , while the Nifty 50 slipped below the key 23,900 level by the end of the trading session.
Market sentiment remained weak throughout the day as declines in heavyweight banking and financial stocks put pressure on the broader indices.
The decline was largely led by financial stocks, which carry significant weight in benchmark indices. Shares of Bajaj Finance were among the worst performers on the Nifty, tumbling around 5% during the session. Other banking and financial stocks also traded lower, adding to the broader market weakness.
Large lenders such as HDFC Bank, ICICI Bank, and Axis Bank also ended the day in the red, dragging the Sensex and Nifty lower.
Auto stocks also saw selling pressure during the session. Shares of Mahindra & Mahindra and Bajaj Auto declined sharply, while Maruti Suzuki also traded lower.
Technology stocks remained weak as well, with Tata Consultancy Services (TCS) and Infosys trading in negative territory.
Despite the broader market decline, a few defensive stocks managed to trade higher. Shares of Sun Pharmaceutical Industries gained during the session, while Coal India, ONGC, and Hindalco Industries also showed relative strength.
However, the gains in these stocks were not enough to offset the heavy losses seen in financial and auto stocks.
Market breadth remained negative, indicating broad-based selling across sectors. Most sectoral indices on the Nifty ended in the red, with financial services and auto stocks leading the losses.
Rahul Singh, Chief Investment Officer – Equities at Tata Asset Management, said recent geopolitical tensions have increased risk perception in the market.
“Recent geopolitical developments in the Middle East have led to an increase in the risk premium for Indian equities, largely driven by concerns around crude prices and their potential impact on the rupee,” he said.
However, he noted that valuations have become relatively more reasonable, with the Nifty trading at around 20 times earnings.
“While near-term sentiment may remain sensitive to global developments, sectors such as consumer and pharmaceuticals could remain relatively insulated, while metals and energy may benefit from higher commodity prices,” Singh added.
He also highlighted improving credit growth as a positive factor for the banking sector.
“Credit growth has also improved to around 14.5 percent, which could support banking sector growth. Overall, earnings growth for the Nifty50 is expected to remain healthy at around 15–17 percent over FY26–FY27,” he said.
Investors are also closely watching institutional flows, as continued selling by foreign institutional investors has weighed on market sentiment in recent sessions.