Sensex Plunges 691 Points as Nifty Drops Below 22,600 Amid Soaring Crude and FPI Outflows

Indian equity benchmark indices suffered a sharp drop at the opening on Wednesday, October 28, 2026, as a steep spike in international crude oil prices and continuous selling by foreign portfolio investors (FPIs) weighed heavily on market sentiment.

The 30-share BSE Sensex tumbled 691.02 points, or 0.94 per cent, to trade at 72,907.65 after opening at 73,253.44 against its previous close of 73,598.67. Simultaneously, the 50-share NSE Nifty 50 slid 183.30 points, or 0.81 per cent, to 22,566.45, breaching the crucial psychological threshold of 22,600. The index had opened at 22,678.00 compared to Tuesday's close of 22,749.75.

Crude Oil Surge and Geopolitical Tensions

The primary catalyst for the domestic market weakness was a fresh run-up in global crude benchmarks driven by renewed West Asian geopolitical concerns. Brent crude climbed 1.32 per cent to trade around USD 115.39 per barrel, while US crude oil rose 1.44 per cent to USD 101.34 per barrel.

Because India imports more than 85 per cent of its crude oil requirements, persistent price levels above USD 110–115 pose immediate threats to the country’s current account deficit, retail inflation trajectory, and corporate input costs. The weakness on Dalal Street unfolded despite overnight gains on Wall Street and resilience across certain Asian markets, illustrating how uniquely vulnerable Indian equities remain to oil supply shocks.

Institutional Flows and Policy Uncertainty

Compounding the pressure on equities is the steady withdrawal of capital by foreign institutional investors. Analysts observed that heavy FPI outflows have triggered broader concerns among market participants, with some speculating about potential policy shifts to stem capital flight.

Dr V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, pointed out that the domestic market setup had turned decisively weak:

“There are reports of possible renewed strikes by the US on Iran after the mid-term elections in the US. Brent crude has again firmed up to above $115, which is bad news for the Indian economy and markets.”

Dr Vijayakumar noted that any durable recovery in Indian equities would require crude oil prices to cool off and foreign portfolio investors to halt their sustained selling streak and return as net buyers. He also highlighted that discussions around potential adjustments to the long-term capital gains (LTCG) tax framework have gained attention in light of persistent overseas selling.

Technical Outlook

Brokers and derivatives analysts noted that Indian indices entered Wednesday's session under cautious undertones following a flat October derivatives expiry cycle. Selling was pronounced across frontline IT companies and private banking counters, which have faced steady profit-taking at higher levels.

According to Hemang Gor, Senior Research Analyst – Derivatives and Technical Research at Axis Direct, technical charts show the Nifty trading below key short-term resistance levels, with immediate support levels now in focus to determine whether the correction deepens.

Key Factors Driving the Dalal Street Selloff:

• Elevated Energy Costs: Brent crude holding firmly above USD 115 per barrel, threatening imported inflation and current account stability.
• Foreign Outflows: Sustained net selling by FPIs dampening frontline large-cap momentum.
• Geopolitical Risks: Cautious stance across emerging market assets amid escalating Middle East tensions.
• Central Bank Watch: Investor caution ahead of the US Federal Reserve's upcoming monetary policy review.