Indian shares fell sharply on Thursday. The Sensex dropped by more than 1,000 points, and investors lost about Rs 10 lakh crore (Rs 10 trillion) in the value of their shares. The Sensex, the index of 30 big companies, fell 1,045 points, or 1.44%, to end at 71,593. That is its lowest level in 32 months. The Nifty50, the broader index of the National Stock Exchange, fell 371 points, or 1.64%, to 22,232.
Why did the market fall? Three things happened at once:
Interest rates went up. The Reserve Bank of India (RBI) raised its main lending rate, the repo rate, to 5.50%. Many traders did not expect this. The repo rate is the rate at which the RBI lends to banks, and it influences what banks charge you on loans. A day earlier, the Sensex had already lost 429 points on the news.
Oil got more expensive. Crude oil rose above $104 a barrel. India buys most of its oil from abroad, so costlier oil means a bigger import bill, and it can push up prices and weigh on the rupee. Reports say the rupee was weaker on the day.
Foreign investors kept selling. Overseas investors, known as foreign portfolio investors (FPIs), sold Indian shares for the ninth session in a row.
Shares of mid-sized companies fell 2.53% and small companies fell 2.34%, more than the big-company indices. The market's "fear gauge," the India VIX, which measures how much investors expect prices to swing, also rose. The day began calmly, with the Sensex opening almost unchanged. Technology shares were briefly higher as investors waited for TCS's quarterly results. But selling picked up through the afternoon, and the Sensex was down as much as 1,177 points just before the close.
The Sensex is now about 12.5% lower than a year ago. It is well below its all-time high of 86,159, set in December 2025. What does this mean for you?
Loans: When the RBI raises rates, banks often raise the interest on loans that float with the market, such as many home loans. Savings and fixed deposit rates can also rise over time.
Prices: Oil above $100 can make transport and goods costlier over the coming months.
Mutual fund SIPs: A SIP invests a fixed amount every month, so when prices fall, the same money buys more units. Many financial planners suggest staying put through short-term drops rather than reacting to one bad day. If you are worried about your own savings, a registered financial adviser can look at your situation.
What to watch next: TCS's results, the price of oil, and whether foreign investors stop selling.
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