Sensex, Nifty Fall Today: RBI Rate Hike, Rising Crude Oil and FII Selling Hit Indian Stock Market

The Indian stock market remained under pressure on Thursday, October 8, with the benchmark Sensex and Nifty 50 extending the previous session's decline. Investors were weighing the impact of tighter monetary policy, elevated crude oil prices and continued foreign fund outflows.

The Sensex fell more than 400 points during morning trade, while the Nifty 50 slipped below the 22,500 level. The decline followed a weak session on October 7, when the Sensex dropped 429.11 points and the Nifty fell 173.05 points.

A key trigger for the latest Sensex and Nifty fall was the Reserve Bank of India's monetary policy decision. The RBI raised the repo rate by 25 basis points to 5.50%, marking its first rate increase in nearly four years.

The central bank also shifted its policy stance to “calibrated tightening”, signalling that inflation and financial conditions could remain important considerations for investors. Higher interest rates can increase borrowing costs and potentially weigh on interest-sensitive sectors and highly leveraged companies.

Rising crude oil prices are another major concern for Indian equities. Brent crude moved above $101–$102 a barrel as continuing tensions in the Middle East and attacks on shipping routes raised concerns about global oil supplies.

The Strait of Hormuz remains particularly important because it is a major route for international oil shipments. Higher crude prices can increase India's import bill and add to inflationary pressures, making the oil market an important factor for the Indian stock market today.

Foreign institutional investors have also remained a major source of pressure. FIIs sold approximately ₹6,121 crore worth of Indian equities on October 7, while domestic institutional investors purchased around ₹4,597 crore.

The continued foreign selling has increased pressure on benchmark indices even as domestic institutions have provided some support.

The Indian rupee has also remained under pressure, trading close to record-low levels against the US dollar. Higher crude prices can increase demand for dollars because India relies heavily on imported oil.

Meanwhile, Asian markets traded lower and US equities ended weaker as rising Treasury yields and concerns about global borrowing costs affected investor sentiment.

Despite the broader weakness, IT stocks showed relative strength during Thursday's trading. Tata Consultancy Services gained after the company kicked off the earnings season, while other major technology stocks also performed better than several sectors.

Investors are now watching upcoming Q2 FY27 corporate earnings, crude oil prices, FII-DII flows, the rupee and further signals from the RBI for direction.

The near-term outlook for the Nifty 50 and Sensex is likely to remain sensitive to movements in crude oil, foreign fund flows, interest rates and geopolitical developments.

A sustained rise in oil prices could increase inflation concerns, while continued FII selling may keep equities volatile. At the same time, stronger corporate earnings could provide support if companies deliver positive results despite the challenging macroeconomic environment.