Sensex slides 2% in 2026 as oil spikes hit banks

Market sell-off deepens as risk-off returns

Indian equities saw repeated bouts of selling pressure across late January to March 2026, with benchmarks slipping on a mix of global risk aversion and domestic currency concerns. In one sharp move, the BSE Sensex closed about 2.2% lower at 71,947.6, described as its lowest level since January 2024. Another data point in the same set put the Sensex down 1,499 points, or 2.04%, at 72,084. The broader narrative across sessions remained consistent: investors reduced risk, and losses spread across sectors. Financials led declines in several sessions, while metals and IT also weighed heavily at different points. Broader markets also showed weakness, with midcaps and smallcaps falling about 1% each in early trade on January 30, according to a Reuters update.

Middle East tensions and crude above $115 drive caution

A key trigger cited was the Middle East conflict and rising oil prices, which fed fears of escalation. The text notes concerns rising as the Houthis joined the conflict and the US deployed more troops. Oil prices were reported to have surged above $115 per barrel in one update, adding to inflation concerns and the import bill for India, a major crude importer. Higher crude was repeatedly linked to weaker sentiment and pressure on the rupee. These global factors created a backdrop where investors were less willing to add exposure to cyclicals and rate-sensitive sectors.

RBI forex-position curbs add pressure on financials

Selling in banks was also linked to a domestic policy move: the central bank imposed stricter limits on onshore forex positions to protect the rupee, which was described as “battered”. In the sharp sell-off session, losses were said to be widespread and led by financials. The banking-heavy Nifty constituents in the provided market table also reflected that tone, with several large lenders closing lower. The combined effect of currency stress, higher oil, and risk-off positioning pushed rate-sensitive and financial names into the spotlight.

Bank stocks lead declines, Bajaj Finance among top laggards

Large lenders and financiers were described as falling in the range of 2% to 5.1% in one session, including ICICI Bank, HDFC Bank, Kotak Mahindra Bank, Axis Bank, SBI and Bajaj Finance. Another update explicitly listed Bajaj Finance (-4.95%), IndusInd Bank (-4.86%) and Kotak Mahindra Bank (-3.59%) as key drivers of the Sensex decline on the day it fell about 2%. In the Nifty 50 snapshot shared by the user, Bajaj Finance closed at 802 (-4.95%), SBI at 980.8 (-3.80%), Axis Bank at 1,168.4 (-3.05%), Kotak Bank at 353 (-3.59%), and HDFC Bank at 735 (-2.80%). The breadth of the fall suggested portfolio de-risking rather than stock-specific news flow.

Autos, industrials and telecom also slip

Beyond financials, several index heavyweights across autos, industrials and telecom were listed among laggards. Maruti Suzuki, Mahindra and Mahindra, L&T, UltraTech Cement, Titan Company and Bharti Airtel were mentioned as falling up to 2.9% in one summary. In the Nifty 50 table, Bharti Airtel closed at 1,789.2 (-2.97%), UltraTech Cement at 10,800 (-2.25%), and Maruti at 12,250 (-1.12%). InterGlobe Aviation (IndiGo) also showed a sharp drop in the table, closing at 3,950 (-3.65%).

Metals turn volatile after sharp rallies and profit booking

Metals were another recurring weak pocket. A Reuters update from January 30 said the metal index fell 3.3% after gaining 8.5% over the previous three sessions. Separate market notes described the Nifty Metal index falling nearly 3% to 11,726 in early trade on February 5, snapping a three-day gaining streak. Another snippet said the Nifty Metal index slipped close to 5% to 11,855.85, ending a three-day winning run where it had gained nearly 9%. Reasons cited included profit booking, weakness in precious metals, global volatility and US Fed uncertainty.

March drawdown highlights pressure from crude and outflows

The sell-off narrative also included a sharp monthly drawdown. One section stated the index slipped over 11% in March, described as the steepest monthly drop since March 2020, weighed by soaring crude oil prices and sustained foreign outflows. Another line, based on trading in a CFD that tracks the benchmark, said the Sensex had declined 10.33% over the past month and was down 5.36% compared to the same time last year. While the dataset mixes multiple sessions and index levels, the direction and drivers were consistent: crude strength, foreign outflows, and currency-related risk.

Key index prints and sector signals (as reported)

Nifty 50 heavyweights: selected moves from the table

What investors tracked next

Across the updates, the market’s immediate sensitivity points were clear: crude prices, headlines around the Middle East conflict, and the rupee’s trajectory. Policy actions aimed at limiting forex risk in the banking system also stayed in focus after the mention of stricter onshore position limits. Sector leadership rotated, with financials frequently leading declines and metals turning volatile after sharp rallies and subsequent profit booking. With the Union Budget referenced as an upcoming event in late January, traders also watched for risk reduction ahead of key domestic policy milestones. Near-term direction remained tied to how quickly global risk sentiment stabilised and whether oil and the currency showed signs of cooling.