Mumbai's Bombay Stock Exchange opened sharply lower on Saturday morning in special pre-session trading data releases, with the Sensex confirming a weekly decline of nearly 7.4% — its worst five-day stretch since February 2024. The benchmark index fell below the psychologically critical 72,000-point threshold, while the Nifty 50 shed approximately 2,200 points over the week. The rupee, meanwhile, touched 88.42 against the US dollar during overnight forward markets, a record low that analysts at ICICI Securities and Kotak Institutional Equities warned could persist well into the second quarter.
The selloff, which accelerated dramatically on Friday, was fuelled by a toxic combination of elevated Brent crude prices hovering near multi-month highs, persistent US dollar strength following Wednesday's Federal Reserve signals of a prolonged higher-rate stance, and net outflows by foreign institutional investors exceeding ₹18,400 crore over the week. Energy and financial sectors bore the brunt of selling pressure, with Reliance Industries, HDFC Bank, and ICICI Bank each shedding between 4% and 6% across the week's sessions.
India's Finance Ministry issued a brief statement Saturday morning acknowledging "elevated global headwinds" and confirming that senior officials from the Reserve Bank of India had convened an emergency review with Finance Secretary Tuhin Kanta Pandey to assess options including potential currency market intervention. The RBI is widely expected to deploy foreign exchange reserves, currently near $640 billion, to arrest the rupee's slide. Senior economist Mythili Bhusnurmath, formerly of the Economic Times, noted on NDTV that "the RBI has ammunition but the question is whether intervention addresses the underlying structural concern around India's widening current account deficit in an era of dear oil."
The contagion extended beyond India's borders on Saturday, with markets in Indonesia, South Korea, and Thailand also registering declines in early Asian trading as investors repriced emerging market risk broadly. The MSCI Emerging Markets Index was on track for its worst weekly performance since late 2023. Analysts at Goldman Sachs Asia revised their near-term outlook for Indian equities downward, cutting their 12-month Sensex target from 85,000 to 79,500 and flagging elevated corporate earnings risk for energy-intensive sectors including cement, aviation, and petrochemicals.
Meanwhile, domestic mutual funds attempted to provide a partial cushion, with data from the Association of Mutual Funds in India showing systematic investment plan inflows remained robust at approximately ₹24,000 crore for March — a sign that retail investors have not yet panicked. Market strategists at Motilal Oswal Financial Services urged long-term investors to remain calm but acknowledged that short-term volatility was likely to persist. "This is a macro-driven correction, not a fundamental deterioration in India's growth story," said analyst Nitin Raheja in a note circulated Saturday. "But visibility will require crude to stabilise and the dollar to ease, neither of which is imminent."