DALAL STREET HAMMERED AS RBI TIGHTENING, SURGING OIL AND FOREIGN SELLING TRIGGER SHARP ROUT

October 8, 2026

Indian equities came under heavy selling pressure on Thursday, with the BSE Sensex plunging more than 900 points and the NSE Nifty50 falling below the 22,300 mark as investors reacted to a combination of tighter monetary policy, rising crude prices, elevated global bond yields and continued foreign institutional selling.

Around 12.37pm, the Nifty50 was trading at 22,371.70, down 310.85 points or 1.38 per cent, while the Sensex stood at 71,764.88, lower by 873.82 points or 1.20 per cent. The sharp sell-off wiped out nearly ₹8.5 lakh crore from the combined market capitalisation of companies listed on the BSE.

A major trigger was the Reserve Bank of India’s decision to raise the repo rate by 25 basis points to 5.5 per cent, its first rate increase in nearly four years. The central bank also shifted its policy stance from “neutral” to “calibrated tightening”, signalling that rate cuts were no longer expected in the immediate period and adding to concerns over tighter financial conditions.

Global bond markets added to the pressure. US Treasury yields climbed sharply, with the 30-year yield moving above 5.71 per cent and the 10-year yield crossing 5.3 per cent. Higher US yields can make dollar-denominated fixed-income assets more attractive and increase pressure on emerging-market equities.

Crude oil prices provided another major source of concern. Brent crude rose by around 2 per cent to above $102 a barrel amid continuing fears over the security of Middle Eastern oil supplies and growing risks to shipping around the Strait of Hormuz. Rising energy costs have also intensified worries about inflation.

Foreign institutional investors continued their heavy selling of Indian equities, adding to the pressure on large-cap stocks. The combination of high US bond yields, tighter domestic monetary policy and elevated oil prices has encouraged sustained caution among overseas investors.

The decline was broad-based, with ITC, Adani Ports, IndiGo, Power Grid and Reliance Industries among the major Sensex losers, falling as much as 4 per cent. Some support came from Titan and major IT stocks including Tech Mahindra, HCL Technologies, TCS and Infosys, which gained up to 2 per cent.

With monetary policy tightening, crude oil remaining above $100 a barrel and foreign investors continuing to withdraw funds, Dalal Street faced a fresh bout of volatility, leaving investors focused on inflation, interest rates, global bond yields and the direction of overseas capital flows.