Dalal Street suffered a sharp sell-off on Thursday, with the BSE Sensex plunging 1,045.46 points to 71,593.24 and the Nifty 50 dropping 371.25 points to a fresh 52-week low of 22,179.90. Over ₹10 lakh crore in market capitalization was erased as the RBI’s shift to ‘calibrated tightening’, Brent crude surging past $104 amid Hormuz tanker attacks, and relentless foreign institutional selling pressured rate-sensitive sectors, even as IT stocks bucked the trend ahead of TCS earnings.

Dalal Street’s two-day recovery halted on Wednesday as benchmark indices retreated following the Reserve Bank of India’s first interest rate hike in 44 months. The Nifty 50 slid 173.05 points to 22,603.05 while the BSE Sensex fell 429.11 points to 72,638.70 after the MPC raised the repo rate by 25 basis points to 5.50% and shifted its stance to ‘calibrated tightening’. Renewed upward pressure on Brent crude above $101, a weakening rupee at 96.70, and steep losses in rate-sensitive consumer durables and auto stocks drove the afternoon selloff.

Ending an extended period of policy accommodation, the Reserve Bank of India has raised the benchmark repo rate by 25 basis points to 5.50% and shifted its policy stance to ‘calibrated tightening’. Announcing the unanimous MPC outcome, RBI Governor Sanjay Malhotra cited stubborn inflation prints and geopolitical oil risks, upwardly revising the FY27 inflation projection to 5.2% while raising the annual GDP growth outlook to a robust 7.1%.

In a major boost for the ease of doing business, the GST Council has approved landmark compliance reforms that eliminate direct arrest powers for tax officials and raise the threshold for criminal prosecution to ₹5 crore. Chaired by Finance Minister Nirmala Sitharaman, the 57th Council meeting also slashed general penalty ceilings to ₹10,000, set up a committee to resolve genuine input tax credit disputes, and established an annual-only rate review cycle beginning April 1, 2027.

Dalal Street built on its turnaround on Tuesday as both the Nifty 50 and BSE Sensex closed at the high of the day, propelled by a 1.5% rally in private banks, double-digit gains in Trent, and a surprise $5-per-barrel price cut by Saudi Aramco on crude shipments to Asia. Despite lingering headwinds from US 10-year bond yields at 5.3%, stabilizing crude oil around $100 and oversold short-covering lifted the Nifty to 22,776.10 ahead of Wednesday’s crucial RBI policy outcome.

Dalal Street halted its longest weekly slump in 25 years on Monday as the Nifty 50 climbed 133.80 points to close at 22,555.75, while the BSE Sensex advanced 472.77 points to 72,382.47. A pullback in international crude prices to $101.41 following the G7’s planned emergency reserve release, combined with an unexpected slowdown in US nonfarm payroll growth, restored risk appetite across banking and non-bank financial leaders despite elevated US Treasury yields and persistent foreign outflows.