Market crash: Sensex sinks 1,280 pts intraday, at 2026 low .

Stock market crash: Analysts flag October rate hike fears, low liquidity, high oil prices, persistent FIIs selling and a long-weekend as some of the key reasons for the market fall on Thursday.

Equity benchmark indices took a sharp hit in mid-noon deals, with the BSE benchmark Sensex tumbling all the way to a new calendar year low. The Sensex crashed 1,280 points in intraday deals, from a high of 72,573 to a low of 71,293. In the process, the index dropped below its previous 2026 low of 71,545 hit on April 02, 2026.

Meanwhile, the NSE Nifty 50 index plunged to an intraday low of 22,217 – down 1.7 per cent or 394 points from the day’s high of 22,611. The index hit a calendar year low at 22,183 in April.

Analysts attributed the sharp fall in market to fears of a likely rate hike in October policy meet, and lack of liquidity.

At 2:15 PM on Thursday, the Sensex quoted with a loss of 1.3 per cent or 900 points at 71,543. The Nifty held a 325-point loss at 22,296.

The Nifty Midcap and the Smallcap indices were down around 1.5 per cent each. Sectorally, the Nifty Auto index sank 4 per cent. The Nifty Metal, Defence and Consumer Durables were down over 2 per cent each.

Index movers & shakers

Auto leaders – Mahindra & Mahindra and Maruti Suzuki were the major losers among the Sensex stocks, down over 4 per cent each. Tata Steel, UltraTech Cement and ITC shed 3-3.5 per cent. Among others, Bharat Electronics (BEL), Adani Ports, Hindustan Unilever (HUL), Eternal, PowerGrid Corporation, Trent and Larsen & Toubro declined over 2 per cent each.

A total of 25 out of the Sensex 30 shares were trading with losses. Whereas, 41 out of the Nifty 50 stocks were in red, with Bajaj Auto as the top loser, down 7 per cent.

The overall market breadth was fairly negative, with 3,250 shares declining on the BSE as against 990-odd advancing stocks.

Key factors behind the market fall on Thursday

Chokkalingam, Founder and Chief Investment Officer at Equinomics Research believes that lack of liquidity and high crude prices as the key reasons for the weak market sentiment. The analyst believes that a large number of IPOs have sucked out liquidity from the market, and with FIIs turning net seller’s stock prices are unable to find enough buyers.

“For the market sentiment to improve at least the pace of IPOs needs to slow down or crude oil prices should see a substantial fall. Either both or at least one of these need to materialise,” says Chokkalingam.

The FIIs reportedly net sold stocks worth ₹44,000 crore in the month of September. FIIs have been aggressive sellers in the Indian stock market for the last two years. According to a study by Motilal Oswal Financial Services, FIIs selling in the last two years has wiped out the cumulative inflows in the preceding eight years.

Meanwhile, Brent oil prices continued to hover around $99 per barrel amid uncertainty surrounding the US-Iran peace talks. Analysts also attributed today’s sharp fall to the upcoming long-weekend, with markets closed tomorrow (Friday October 02) on account of Gandhi Jayanti.

Kranthi Bathini, Equity Strategist at WealthMills Securities also flags fears of a likely rate hike in the upcoming RBI policy as a key factor.

“With bond yields rising, and fears of a likely spike in inflation the market consensus is now toward a likely rate hike in October, which in turn could slowdown growth,” says Bathini. He added that traders were unwilling to take fresh longs ahead of the long weekend.

Disclaimer: Moneywealth research provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

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