5 Reasons Why Sensex and Nifty Fell Sharply Today, HMPV and More

Discover the 5 key reasons behind today’s sharp fall in Sensex and Nifty. From global economic concerns to domestic factors, find out what caused the stock market decline.

New Delhi: – Domestic stock markets witnessed a dramatic sell-off on Monday, with benchmark indices, including the S&P BSE Sensex and NSE Nifty50, facing significant losses. The Sensex plummeted by over 1,200 points, while the Nifty50 tumbled by more than 2%, hitting an intraday low of 23,601.50, sparking concerns among investors.

Sensex and Nifty Hit Hard

At 1:34 pm, the Sensex was down by 1,179.72 points, trading at 78,035.88, while the Nifty50 fell by 363.20 points, bringing the index to 23,641.55. The sudden decline in market values was accompanied by heightened volatility, with the Nifty50’s volatility index spiking to 14.5, signaling increased nervousness among investors.

Broader market indices also faced sharp declines. The Nifty Smallcap100 and Nifty Midcap100 indices saw steep losses of 2.60% and 2.40%, respectively. Sectoral indices, particularly those related to PSU banking, metals, and realty, also took a hit, with no sector managing to stay in the green.

Multiple Factors Behind the Market Slump

Experts have pointed to several factors contributing to the market downturn. These include weak global economic cues, persistent Foreign Portfolio Investor (FPI) outflows, and recent domestic concerns such as the detection of Human Metapneumovirus (HMPV) cases in India.

Weak Global Economic Conditions Global economic conditions remain unfavourable, with the US dollar index hovering at a high of 109 and the 10-year US bond yield at 4.62%. Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, “The FIIs are likely to continue selling until the yields decline and the dollar stabilizes.” The adverse global cues are weighing heavily on Indian markets, creating a challenging environment for investors.

Also Read: HMPV in India: Are Bengaluru’s Cases Linked to China’s Respiratory Surge? Health Ministry Responds

Sectoral Sell-off the market experienced a broad-based sell-off, particularly in the PSU banking, metal, and realty sectors. The Nifty PSU Bank index fell by 3.63%, while Nifty Metal and Realty indices dropped 2.98% and 2.77%, respectively. The Nifty Smallcap100 index, reflecting the overall market sentiment, also experienced a significant decline as selling pressure increased across various sectors.

Virus Scare Triggering Panic A new factor contributing to the market volatility was the discovery of two cases of Human Metapneumovirus (HMPV) in Bengaluru. While the virus is not expected to have the same impact as Covid-19, it caused a knee-jerk reaction in the market. According to The Head of Research at StoxBox, “Market sentiment may have turned a little sour due to the initial HMPV cases found in India, but its impact may be limited as the fatality seems to be lower compared to the Covid virus.”

FPI Selling and Rising Dollar The persistent FPI selling, coupled with a strengthening dollar, has intensified the market downturn. The director of Mirae Asset Capital Markets pointed out, “The government’s capex spending remains elusive, while the depreciation of the Rupee has intensified. A revival in consumption is still not evident. The market is waiting for strong positive triggers, which are still missing.”

Concerns Over Weak Business Updates In addition to global concerns, weak business updates from key sectors, especially banking and FMCG, further dampened market sentiment. “Markets have been under pressure primarily due to weak business updates by companies, especially banks and some FMCG stocks,” said analyst Chowdhury. These disappointing updates have contributed to the overall negative sentiment in the markets.

What’s Next for the Market?

With the upcoming corporate earnings season, the Union Budget, and global trade policies on the horizon, market volatility is likely to remain high in the near term. Experts suggest that investors will be closely monitoring these developments for any signs of improvement in market conditions.

In the meantime, heightened caution remains the key as global factors, domestic economic updates, and health concerns continue to shape the market’s direction.