Benchmark indices remained under pressure in afternoon trade on Thursday, with the BSE Sensex falling over 1,000 points and the NSE Nifty slipping below the 23,750 mark, as investors booked profits following the previous session’s sharp rally and reassessed risks amid renewed tensions in West Asia.

The decline comes a day after markets logged their strongest single-day gains in nearly over a year on optimism around a US-Iran ceasefire. However, fading confidence in the durability of the truce and fresh geopolitical developments have triggered broad-based selling.

Financials lead decline; banks under pressure

Selling was led by financial stocks, with private banks emerging as the biggest drag on the indices. The Nifty Private Bank index was down nearly 1.9%, while the broader Nifty Financial Services index declined about 1.6%. PSU banks also traded weak, with the Nifty PSU Bank index falling over 1.4%.

The sharp correction in financials follows Wednesday's rally, indicating profit booking in heavyweight stocks that had driven the earlier gains.

Cyclicals weak; broader market follows

Among other sectors, Nifty Auto (-0.85%), Nifty Media (-0.82%), and Nifty Consumer Durables (-0.81%) were major laggards, reflecting a risk-off mood amid rising crude prices and global uncertainty.

FMCG, oil & gas and realty indices also traded in the red, though losses were relatively contained. IT stocks saw marginal declines, indicating limited selling pressure compared to financials.

Broader markets mirrored the weakness, with midcap and smallcap indices also trading lower, pointing to a widespread correction rather than stock-specific moves.

Defensives, metals see selective buying

In an otherwise weak market, defensive sectors saw selective buying. Pharma and healthcare indices rose around 0.4–0.5%, while metals emerged as the top outperformer, gaining close to 0.8%.

The shift indicates a rotation of funds into relatively safer pockets of the market as uncertainty around geopolitical developments persists.

Market participants said the pullback was driven by a combination of profit booking and caution, as crude oil prices rebounded after an initial drop following ceasefire announcements.

The situation in West Asia remains fluid, with concerns around shipping disruptions and energy supply routes, particularly through the Strait of Hormuz, continuing to influence sentiment.