Equity benchmarks fell sharply on Thursday, weighed down by rising US bond yields and weak inflation data from China, with the BSE Sensex dropping 528.28 points to close at 77,620.21 and the NSE Nifty declining 162.45 points to end at 23,526.50.

The market breadth remained negative with 2,750 stocks declining compared to 1,211 advances on the BSE. The selling pressure was broad-based as most sectoral indices ended in the red, except for FMCG stocks which showed resilience.

“The Indian stock market mirrored the decline across its Asian peers, with cautious investor sentiment driven by a sell-off in US bonds. The US 10-year Treasury yield surged to its highest level since April 2024, signalling expectation of fewer rate cuts by the Fed,” said Vinod Nair, Head of Research at Geojit Financial Services.

Among the Nifty constituents, Bajaj Auto emerged as the top gainer, rising 2.11 per cent, followed by Nestle India (+1.76 per cent), HUL (+1.62 per cent), M&M (+1.48 per cent), and Britannia (+1.28 per cent). On the flip side, ONGC led the losers with a 2.59 per cent decline, followed by Shriram Finance (-2.41 per cent), BPCL (-2.00 per cent), Coal India (-1.95 per cent), and Tata Steel (-1.90 per cent).

The broader markets also faced selling pressure, with the Nifty Midcap 100 falling 0.93 per cent and the Nifty Smallcap 100 declining 1.35 per cent. The volatility index, India VIX, rose 1.33 per cent to 14.66, indicating increased market uncertainty.

In the currency market, the rupee recovered slightly from its record low to close at 85.87 against the US dollar, gaining 4 paise from its previous close. The domestic currency had touched an all-time low of 85.94 during intraday trading.

Chemical stocks provided some relief to investors as SRF Ltd and Navin Fluorine International surged up to 14 per cent following a report by Equirus Capital highlighting a significant increase in global refrigerant gas prices.

“Disappointing inflation data from China added pressure, indicating that recent stimulus measures have failed to rejuvenate one of the world’s largest consumer markets. Domestically, the FMCG sector outperformed, while other sectors declined, anticipating only modest improvement in Q3 earnings estimates,” Nair added.

The market saw significant institutional selling, with Foreign Institutional Investors (FIIs) offloading ₹3,362.18 crore worth of shares on Wednesday, according to exchange data.

Looking ahead, market experts suggest caution. “Market sentiment is expected to react to TCS’s earnings announcement in early Friday trades, which could set the initial tone. The overall outlook remains tilted towards a bearish trend,” said Ajit Mishra, SVP Research at Religare Broking Ltd.

The Realty index was the worst performer among sectors, falling over 2 per cent, followed by Energy and IT indices. Brent crude oil futures traded at $76.14 per barrel, down 0.03 per cent.

Technical analysts noted key levels for the market. “If index holds 23,460, then short term pullback towards 23,800-23,900 possible. On the higher side, the index will find resistance near the 23,930 mark,” said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates Ltd.