Benchmark stock market indices ended sharply lower on Thursday, dragged down by heavy selling in banking and financial stocks after disappointing earnings from State Bank of India (SBI) hurt investor sentiment.
The BSE Sensex closed at 77,328.19, down 516.33 points or 0.66%, while the NSE Nifty50 settled at 24,176.15, lower by 150.50 points or 0.62%.
Banking stocks emerged as the biggest drag on benchmark indices during the session, with SBI plunging 6.74% to close at Rs 1,018.40 after reporting weaker-than-expected Q4 earnings.
The sharp fall in SBI came after pressure on treasury income overshadowed stable core banking performance, triggering broader weakness across financial stocks. HDFC Bank fell 1.89%, Axis Bank declined 1.76%, Bajaj Finance slipped 1.88% and Shriram Finance dropped 1.24%.
Weakness in metals, infrastructure and energy stocks further weighed on markets. Coal India declined 2.07%, UltraTech Cement fell 1.61%, ONGC slipped 1.62% and Larsen & Toubro ended 1.12% lower.
Investor sentiment also remained cautious amid uncertainty around crude oil prices and geopolitical tensions in West Asia, with markets continuing to react to developments linked to Iran and the broader Middle East.
However, selective buying in IT, healthcare and consumer stocks helped limit sharper losses. Titan surged 4.86%, Apollo Hospitals jumped 3.42%, Asian Paints gained 2.74% and Infosys rose 1.44%.
Vinod Nair, Head of Research at Geojit Investments Limited, said markets witnessed a risk-off session after fresh US-Iran military action near the Strait of Hormuz weakened hopes of a ceasefire and triggered profit booking.
However, he noted that stability in crude oil prices around $100 per barrel and relatively benign US bond yields continue to support broader sentiment and the rupee.
“Though the road ahead is slightly bumpy, optimism around a possible diplomatic resolution persists,” Nair said.
He added that investors continue to focus on opportunities emerging from favourable corporate earnings, particularly in the midcap and smallcap space where valuations in several counters remain attractive.
According to Nair, sectoral trends remained mixed during the session, with IT and consumer durables showing relative strength despite the uncertain global backdrop.
Market experts said volatility is likely to remain elevated in the near term as investors track global developments, crude oil prices, foreign investor activity and the ongoing Q4 earnings season.