Mumbai: Dalal Street witnessed a severe downturn on Thursday, October 8, 2026, with the benchmark BSE Sensex sliding more than 1,000 points and the NSE Nifty 50 facing heavy selling pressure across sectors. The broad-based liquidation erased approximately ₹8 lakh crore in total market capitalisation on the Bombay Stock Exchange in a single session, leaving investors contending with an intense sell-off.
The primary catalyst behind the domestic market rout was the Reserve Bank of India’s latest monetary policy announcement. The central bank raised the benchmark repo rate by 25 basis points to 5.50% while shifting its stance from “neutral” to “calibrated tightening”. While the rate revision was largely priced in, the hawkish change in policy stance triggered significant unease, indicating that the tightening cycle may extend further to counter stubborn price pressures and rising crude import costs.
Escalating geopolitical instability in West Asia compounded the negative sentiment, driving international crude benchmarks higher. Surging Brent crude prices, sparked by heightened security friction and regional supply uncertainties, raised concerns about India’s widening trade balance, elevated import expenditure, and domestic inflationary spikes.
The downturn was exacerbated by renewed capital outflows from Foreign Institutional Investors (FIIs), who accelerated offloading in emerging market equities following elevated United States bond yields and stronger US dollar valuations. With rate sensitivity dampening interest across banking, auto, and real estate counters, and high-beta metal stocks facing sustained liquidation, domestic institutional buying was insufficient to absorb the heavy wave of supply, dragging all key sectoral indices into the red.
