Why is market falling today? N Chandra’s exit among 3 factors behind 550-pt Sensex slide; Nifty below 24,300

The Indian stock market extended sharp losses on Wednesday, with the Sensex and the Nifty falling around 0.75% each as Tata Sons Chairman N Chandrasekaran resigned, triggering a sharp fall in Tata Group stocks, along with rising oil prices that spooked investors.

At 1:57 pm, Sensex dropped over 550 points to trade below 77,600 mark, while the Nifty 50 lost over 150 points to trade below 24,300 level on Wednesday. The sharp losses wiped off more than Rs 2 lakh crore from the total market capitalisation of all BSE-listed companies, pulling it down to less than Rs 491 lakh crore.

TCS, Tata Steel and Titan shares were the top losers on the Sensex, falling 2-5%. M&M, Infosys, Adani Ports and L&T shares followed, dropping 1-2%. SBI shares, meanwhile, bucked the trend to rise around 1%.


Broader markets also slipped into the red, with the Nifty Smallcap 100 and the Nifty Midcap 100 indices falling around 0.3%. This came as the India VIX, which measures volatility in the market, inched 1% higher to 12.

Among the sectors, the Nifty IT index tumbled more than 2% as heavyweight TCS shares crashed 5%. Nifty Consumer Durables, meanwhile, fell more than 1% to follow. The Nifty PSU Bank index, however, gained over 1.5%. The overall market breadth turned negative, with the NSE seeing 1,283 advances against 1,967 declines, while 95 stocks remained unchanged.

Also Read: Godrej Consumer Products shares tank 10% after MD, CEO exit. What are Citi analysts saying?

Here are the key factors pushing the market down today.

1. Tata Sons Chairman N Chandrasekaran resigns

N Chandrasekaran on Wednesday resigned as Tata Sons Chairman after one board member did not support the proposal to extend his tenure. The Economic Times was the first to break the development this morning. Chandrasekaran’s current tenure as chairman of Tata Sons ends on February 20 next year.

“Tata Sons is a very large institution and there are many strategic projects that are under critical stages of execution,” he said. “It is not only necessary to have a leader in place to lead the Group beyond Feb 2027, but also clarity on leadership is important for employees, investors, partners and other stakeholders… Under these circumstances, earlier today, I have communicated to the Tata Sons Board that I have decided not to offer myself for reappointment when my term ends,” he added.

Following this, shares of the salt-to-airlines conglomerate Tata Group companies tumbled sharply, with heavyweight stocks including TCS, Titan and others pulling down overall market indices.

TCS, which has the largest market capitalisation in the Tata pack, crashed around 5%. Titan and Tata Steel fell around 2% each, while Trent shares were down around 1%. Tata Motors Passenger Vehicles (TMPV) was down 3%, while Tata Consumer and Tata Power fell up to 2%.

2. Oil prices rise

Oil prices rose on Wednesday as doubts over the US and Iran reaching a peace deal and attacks on two ships fuelled concerns about disruptions to Middle East supplies. Brent crude futures neared $90 per barrel, while WTI crude futures traded close to $84 per barrel.

Iran's top security official Mohsen Rezaei said the Strait of Hormuz would remain closed unless the US accepted Iran's conditions to end the war, including the release of its frozen assets and an end to other regional conflicts. US President Donald Trump, meanwhile, said the United States may let Iran "bop along" or "hit them really, really hard”.

3. Rupee falls

The rupee dropped 5 paise to 95.41 against the US dollar in early trade today. This came as rising oil prices and weaker Asian currencies weighed on sentiment, while the central bank is likely to limit the decline.

Brent crude moving higher towards $90 per barrel is raising concerns over India's import bill and limiting the rupee's recovery, said Jateen Trivedi, VP Research Analyst of Commodity and Currency, LKP Securities. “Going forward, the currency will take cues from crude oil, the Dollar Index and FII flows, with US inflation data also likely to influence the dollar. Technically, the rupee range is seen between 95.25–95.75 in the near term,” he added.

What lies ahead for Dalal Street?

The impact of Chandrasekaran’s resignation is expected to be a knee-jerk reaction as he has been at the helm for a long time, said Ambareesh Baliga. “We have witnessed such uncertain periods for the Tata Group, when Ratan Tata had taken over in the early 1990s and more recently during the Cyrus Mistry imbroglio, but it has always managed to steer through. So this time it shouldn’t be any different,” he added.

Meanwhile, the market is defying a breakout on the upside and is moving sideways, said VK Vijayakumar, Chief Investment Strategist at Geojit Investments. He noted that the principal factor restraining a rally is the strengthening Brent crude, which has again moved above the $89 level. The off-and-on US-Iran skirmishes continue, with the latest attack by the US military on a Panama-flagged container ship. Iran now appears to be hardening its stance on the opening of the Strait of Hormuz. This might keep crude prices elevated, constraining a rally in the market, according to the analyst.

“On the positive side, India’s growth resilience is getting better. The latest report from SBI projects FY27 GDP growth at 8% against the RBI’s 6.7%. This optimism is based on trends in most leading indicators. If this turns out to be true, corporate earnings for FY27 will be much better-than-expected. This is a bullish factor,” Vijayakumar said, adding that a significant trend in the market is the hyperactivity in the mid and small-cap segments where stocks are responding to results and news.

Technical view on Nifty

Technically, Nifty’s undertone remained subdued yesterday below 24,650, said Rajesh Palviya, Head of Research at Axis Direct. He noted that the benchmark index will likely find immediate support at 24,400, followed by 24,250–24,200.

A sustained recovery in crude could, however, trigger renewed buying and push the index towards 24,800, according to the analyst.

(With inputs from agencies)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)