Stock Market Crash: HMPV case detection in Bengaluru scares investors, Sensex down 1,200 points

After the Indian government confirmed two cases of Human Metapneumovirus (HMPV) in Karnataka amid reports of a virus outbreak creating havoc in China, stock market investors chose to play it safe, with the Sensex falling over 1,100 points and Nifty losing around 1.4%.The fear gauge index, India VIX, jumped 13% as a widespread sell-off was seen across mid and small-cap stocks as well as in various sectors. The Sensex fell over 1,200 points to its day’s low of 77,960, while the Nifty tumbled near the 23,600-level.

Metals, PSU banks, real estate, oil and gas and financials were among the worst-hit sectors. Union Bank of India shares fell 7% while Bank of Baroda, HPCL, BPCL, Tata Steel, Adani Energy Solutions and PNB were down around 4-5% each.

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Among heavyweights, HDFC Bank, Reliance Industries (RIL), and Kotak Mahindra Bank were among the biggest drags on the Sensex.

What triggered stock market crash today?

While investors were focused on tracking earnings updates and expectations around the Q3 results season, which begins this week, as well as developments surrounding the Trump presidency and geopolitical issues, the news about HMPV has caught them by surprise.

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While confirming the detection of two HMPV cases in Karnataka, the Union Health Ministry said the cases were found through routine surveillance for multiple respiratory viral pathogens, as part of ICMR’s ongoing efforts to monitor respiratory illnesses across India.

Both the cases are of infants. While the 3-month-old female infant, who was diagnosed with HMPV after being admitted to Baptist Hospital, Bengaluru with a history of bronchopneumonia, has been discharged, an 8-month-old male infant, who tested positive for HMPV on January 3, 2025, is now recovering.

Also read | HMPV cases in India: Health Ministry confirms two cases in Karnataka

The Union Health Ministry has assured citizens that there is no cause for alarm and that India is closely monitoring the global HMPV situation through various channels. The ministry has also requested regular updates from the World Health Organization (WHO).

As a precautionary measure, the ministry plans to expand the number of laboratories testing for HMPV cases and has tasked the Indian Council of Medical Research (ICMR) with year-round monitoring of HMPV trends.

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“The situation in China is not unusual in view of the ongoing flu season. The reports also suggest that the cause of the present surge is Influenza virus, RSV and HMPV – the usual pathogens that are expected during the season,” the Union Health Ministry had said last week following a meeting.

The ministry had said physicians from hospitals have confirmed that there is no surge in respiratory illness cases in the last few weeks other than the expected seasonal variation.

The stock market has already been impacted by FII outflows, which is already about half a billion dollars in January so far, according to NSDL data.

“The market is likely to be influenced by the negative factors impacting FII flows and some positive domestic factors which can support the market. The external macro construct continues to be unfavourable with the dollar index at 109 and the 10-year US bond yield at 4.62%. The FIIs are likely to continue selling till the yields decline and the dollar stabilizes,” Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, said.