Sensex and Nifty Plunge: Over ₹8 Lakh Crore Lost on October 21
Indian equity markets faced a significant downturn on October 21, erasing over ₹8 lakh crore in investor wealth amid rising oil prices and bond yields.
Sensex dropped 143 points to close at 73,710, while Nifty fell 78 points to 22,811.
Brent crude oil prices surged past $110 a barrel, raising concerns over inflation and corporate profits.
Investors are wary of rising bond yields, with India's 10-year government bond yield reaching 7.43%, its highest since 2023.
On October 21, Indian equity markets experienced a dramatic sell-off, leading to a staggering loss of over ₹8 lakh crore in investor wealth. The benchmark indices, which initially opened higher, faced a sharp reversal, with the Sensex plummeting more than 1,300 points from its intraday peak and the Nifty dropping nearly 2% before partially recovering.
By the end of the trading session, the Sensex settled down by 143 points at 73,710, while the Nifty 50 closed 78 points lower at 22,811. The broader market reflected similar trends, with the Nifty Midcap index declining by nearly 2% and the Smallcap index falling around 2.4%, indicating widespread selling pressure across various sectors.
Several key factors contributed to this market decline. First, the surge in Brent crude oil prices, which exceeded $110 a barrel, reignited fears regarding India's oil import expenses and the potential effects on inflation and corporate profitability. As a major crude oil importer, India’s markets are particularly sensitive to fluctuations in oil prices.
Additionally, rising bond yields have raised concerns among investors. The attractiveness of bonds relative to equities increases with higher yields, which can also lead to increased borrowing costs. Notably, India's 10-year government bond yield reached 7.43%, marking its highest level since 2023, although this figure should be verified against market data.
The abrupt reversal in the market followed an early rally, where the indices had gained nearly 1% before the downturn. This suggests that selling pressure intensified after initial gains. Company-specific issues further exacerbated the situation, with notable declines in stocks such as Bajaj Finance, ABB India, and SRF due to disappointing earnings reports. Auto stocks also faced declines of 2-3% in response to October vehicle registration data.
Looking ahead, analysts are closely monitoring the Nifty's support levels, with Sudeep Shah from SBI Securities highlighting the 22,670–22,690 range as critical. A breach below this support could lead to further declines, exposing the index to the next support level at 22,500–22,520.
