Mumbai: Benchmark stock market indices ended sharply lower on Thursday, weighed down by heavy selling in banking and financial stocks after disappointing quarterly earnings from State Bank of India (SBI) dented investor sentiment. Broader market caution amid global uncertainties further added to the decline.

The BSE Sensex closed at 77,328.19, down 516.33 points or 0.66%, while the NSE Nifty50 settled at 24,176.15, lower by 150.50 points or 0.62%. The decline marked a risk-off session for equities, with banking stocks emerging as the biggest drag on benchmark indices.

SBI slump triggers banking sell-off

Shares of SBI plunged 6.74% to close at ₹1,018.40 after the lender reported weaker-than-expected Q4 earnings. The sharp fall in the country’s largest bank triggered a broader sell-off across the financial sector.

The earnings disappointment was largely driven by pressure on treasury income, which overshadowed otherwise stable core banking performance. Rising bond yields impacted the valuation of government securities, significantly reducing treasury gains and raising concerns about earnings quality.

The negative sentiment spilled over to other major lenders and non-banking financial companies. HDFC Bank declined 1.89%, Axis Bank fell 1.76%, Bajaj Finance slipped 1.88%, and Shriram Finance dropped 1.24%, reflecting widespread caution among investors.

Weakness spreads across sectors

Selling pressure was not limited to banking stocks, as several other sectors also ended in the red. Metal, infrastructure, and energy stocks witnessed notable declines, contributing to the overall weakness in the market.

Coal India fell 2.07%, UltraTech Cement declined 1.61%, ONGC slipped 1.62%, and Larsen & Toubro ended 1.12% lower. The broad-based selling highlighted investor concerns over global economic conditions and commodity price volatility.

Market participants remained cautious amid uncertainty surrounding crude oil prices and geopolitical tensions in West Asia. Developments linked to Iran and the broader Middle East continued to influence market sentiment, adding to volatility.

IT and defensives limit losses

Despite the widespread decline, selective buying in certain sectors helped limit sharper losses in the indices. IT, healthcare, and consumer stocks showed resilience during the session.

Titan Company surged 4.86%, Apollo Hospitals jumped 3.42%, Asian Paints gained 2.74%, and Infosys rose 1.44%. These gains provided some support to the benchmarks and prevented a steeper fall.

The buying interest in defensive and consumption-oriented stocks indicates that investors are selectively positioning themselves in relatively stable sectors amid uncertain market conditions.

Global cues and crude oil in focus

According to market experts, the session was marked by a shift towards risk aversion, influenced by global developments. Vinod Nair, Head of Research at Geojit Investments Limited, said that fresh US-Iran military action near the Strait of Hormuz weakened hopes of a ceasefire and triggered profit booking across markets.

He noted that while crude oil prices hovering around $100 per barrel and relatively stable US bond yields have provided some support to broader sentiment and the rupee, uncertainty continues to weigh on investor confidence.

“Though the road ahead is slightly bumpy, optimism around a possible diplomatic resolution persists,” Nair said.

Investors are also closely tracking foreign institutional investor (FII) activity, which has remained volatile in recent sessions, adding to market swings.

Outlook remains volatile

Market experts believe that volatility is likely to remain elevated in the near term as investors navigate a mix of domestic and global factors. Key triggers include the ongoing Q4 earnings season, crude oil price movements, geopolitical developments, and global economic indicators.

Despite the near-term uncertainty, analysts pointed out that opportunities continue to emerge in select segments, particularly in midcap and smallcap stocks where valuations remain relatively attractive.

Sectoral trends are expected to remain mixed, with IT and consumer-focused stocks showing resilience, while banking and interest rate-sensitive sectors may face intermittent pressure.

Conclusion

Thursday’s sharp decline in benchmark indices underscores the sensitivity of markets to earnings disappointments and global risks. SBI’s weaker-than-expected results acted as a catalyst for broader selling in banking stocks, amplifying the fall.

While underlying economic fundamentals remain stable, near-term market direction will likely be shaped by earnings outcomes and global developments. Investors are expected to remain cautious, with a focus on quality stocks and sectoral opportunities amid heightened volatility