Sensex, Nifty plunge 1% each on weak global cues, profit booking

By | June 13, 2025
Sensex Nifty plunge 1% on June 13 due to global tensions

India’s benchmark stock indices, the Sensex and Nifty 50, recorded a sharp fall of around 1% each on Thursday, June 13, 2025. The slide came after a combination of unsettling global developments, including heightened geopolitical tensions in West Asia, surging crude oil prices, and widespread profit booking among investors.

This market correction comes just after a record-breaking rally earlier in the week, and serves as a reminder of the volatility that global uncertainty can trigger in emerging economies like India.

Geopolitical Tensions Rattle Investor Confidence

The immediate trigger for Thursday’s market plunge was news of renewed Israeli airstrikes on Iran, intensifying already fragile geopolitical tensions in the Middle East. These developments have spurred fears of a broader regional conflict, pushing global crude oil prices up by nearly 9% overnight. Brent crude futures surged past the $91 per barrel mark, while WTI futures climbed over $87.

For a country like India, which imports more than 80% of its oil, such a sharp increase in crude prices directly impacts inflation, trade balances, and currency stability. Rising oil prices lead to increased input costs for businesses, reduced consumer spending power, and pressure on the Reserve Bank of India to revisit its monetary stance.

Sensex and Nifty React Sharply

The BSE Sensex plunged by over 1,100 points during intraday trading, before settling at 81,087.12, down 823.54 points or 1.01%. Meanwhile, the Nifty 50 shed 251.20 points to close at 24,511.10, marking a drop of 1.02%.

All sectoral indices on the NSE ended in the red, reflecting widespread selling pressure. Major drags included banking, oil & gas, IT, and FMCG stocks. Broader markets underperformed, with both mid-cap and small-cap indices falling between 1.2% and 1.8%.

Profit Booking After a Strong Rally

Market analysts pointed out that Thursday’s correction was not entirely unexpected. Both the Sensex and Nifty had recently hit all-time highs on the back of strong domestic earnings, political stability, and foreign capital inflows. In the days leading up to this decline, the markets had surged nearly 4% since the start of June.

Such a rapid ascent often triggers profit booking, where institutional and retail investors cash in on gains. The combination of global anxiety and stretched valuations made Thursday a likely day for traders to lock in profits.

“After a strong bull run, markets are naturally vulnerable to global jitters. Today’s dip reflects a mix of profit-taking and legitimate concern over global developments,” said Aarti Shah, equity strategist at a Mumbai-based brokerage.

Sector-Wise Breakdown: Who Lost the Most?

Here’s how some of the key sectors performed on the day:

  • Oil & Gas: Stocks like ONGC, BPCL, and HPCL tumbled between 3% to 4% as higher crude oil prices threaten refining margins.
  • IT Sector: Concerns about global demand and U.S. economic data weighed down IT majors like Infosys, TCS, and HCL Technologies.
  • Banking & Finance: Heavyweights such as HDFC Bank, SBI, and Axis Bank lost ground amid inflationary fears and bond yield volatility.
  • FMCG & Consumer Goods: Rising input costs and potential inflationary pressures spooked FMCG investors, dragging down companies like Hindustan Unilever and Nestlé India.

Global Cues Add to Nervousness

Beyond geopolitical tensions, investors are closely watching U.S. inflation data, expected to be released this week. Sticky inflation in the U.S. could delay any expected interest rate cuts by the Federal Reserve, which in turn affects foreign capital flows to emerging markets like India.

Additionally, concerns over a potential escalation in U.S.–China trade tensions—after recent reports hinted at tariffs on Chinese electric vehicles—have also contributed to the nervous mood on global bourses.

Asian peers such as the Nikkei, Hang Seng, and Shanghai Composite also saw declines ranging from 0.5% to 1.2%, further dampening sentiment on Dalal Street.

Market Volatility Expected Ahead

The India VIX, a measure of market volatility, jumped by over 9% on Thursday, indicating growing anxiety among traders. The spike was further aggravated by the weekly F&O expiry, which tends to magnify price swings.

Going forward, analysts expect volatility to remain elevated in the near term. Any de-escalation in West Asia or clarity from the U.S. Federal Reserve could help stabilize the mood. However, in the absence of such developments, investors should brace for potential choppiness.

What Should Investors Do?

For long-term investors, analysts recommend a wait-and-watch approach, rather than panic selling.

“This is not a structural breakdown. As long as the domestic macro fundamentals stay strong, India remains a compelling investment story. But near-term caution is warranted,” said Sandeep Tiwari, fund manager at Axis Mutual Fund.

Short-term traders, on the other hand, may consider hedging positions or reallocating from high-beta sectors like smallcaps and midcaps to safer large-cap plays or defensive sectors such as pharma and utilities.

Conclusion: A Timely Reality Check for Dalal Street

Thursday’s market drop serves as a wake-up call after an extended period of bullish euphoria. With foreign factors playing an increasingly dominant role in shaping sentiment, Indian investors must stay alert and diversified.

The broader narrative for Indian markets remains positive—but as today’s events show, global events can quickly shake domestic optimism. A balanced approach, driven by fundamentals and risk assessment, is the best strategy for navigating these turbulent times.