Market Bloodbath: Sensex and Nifty Crash as RBI Hikes Repo Rate
Sensex and Nifty plunge as RBI hikes repo rate to 5.50% and FIIs continue massive selling spree, erasing lakhs of crores in market value.
The Indian equity markets faced a brutal onslaught on Thursday, October 8, 2026, as benchmark indices plummeted. The double blow of the Reserve Bank of India’s (RBI) aggressive monetary tightening and a relentless selling spree by Foreign Institutional Investors (FIIs) wiped out approximately Rs 10 to 11 lakh crore in market capitalization in a single session.
Indices Hit Major Lows
Investors witnessed a sea of red as both the BSE Sensex and Nifty 50 struggled to find footing. The BSE Sensex tumbled by 1,045.46 points, or 1.44%, closing at 71,593.24. During the trading session, the index touched an intraday low of 71,327.75.
The Nifty 50 faced even steeper losses, shedding 371.25 points (1.64%) to end at 22,231.80. The index even breached a fresh 52-week low, sliding to 22,179.90 during the day's volatile trading.
The RBI Trigger: Rate Hike and Inflation Concerns
The primary catalyst for the downturn was the Monetary Policy Committee’s decision on October 7 to increase the repo rate by 25 basis points to 5.50%. RBI Governor Sanjay Malhotra signaled a shift toward "calibrated tightening," indicating that the central bank remains vigilant against inflation.
Key economic projections driving this hawkish stance include:
- CPI Inflation: Projected at 5.2% for the 2026-27 period.
- GDP Growth: Estimated at 7.1%.
FII Exit and Global Headwinds
Adding fuel to the fire, Foreign Institutional Investors (FIIs) continued their massive exodus from Indian equities. On October 7 alone, FIIs offloaded stocks worth over Rs 6,121 crore. This marks a staggering nine consecutive sessions of net selling, with the total outflow reaching nearly Rs 57,000 crore.
While Domestic Institutional Investors (DIIs) attempted to cushion the fall with net purchases of roughly Rs 4,596 crore, it was not enough to stem the tide. Global factors also weighed heavily on sentiment, including:
- Crude Oil: Brent crude prices climbed above USD 104 per barrel.
- US Treasury Yields: The 10-year yield approached 5.3%, while the 30-year yield crossed 5.71%.
- Currency: The Indian rupee weakened to 96.75 against the US dollar.
Sectoral Performance and Market Volatility
The crash was widespread, affecting almost all market segments. The Nifty Midcap 50 saw a sharp decline of 2.71%, while both the Nifty Midcap 100 and Smallcap 100 indices fell by more than 2%. Fear in the markets was reflected in the India VIX volatility index, which surged by more than 10%.
Sector-wise, the Nifty Metal index led the carnage, dropping over 3%. Other heavily impacted sectors included Realty, Oil & Gas, Energy, Auto, Pharma, FMCG, and Financial Services.
Major Laggards:
- Adani Enterprises
- JSW Steel
- ITC
- Adani Ports
- IndiGo
- Power Grid
- Reliance Industries
Resilient Stocks:
Despite the general gloom, some heavyweights managed to show resilience, including Infosys, Axis Bank, TCS, Tech Mahindra, HCL Technologies, Titan, and Nestlé India.