Why stock market is down today? Sensex nosedives 1,200 points: 3 key reasons behind bloodbath on Dalal Street

Benchmark stock market indices fell sharply after opening higher on Monday, led by a decline in PSU banking sector stocks.

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The S&P BSE Sensex was down 1165.74 points to 78,057.37, while the NSE Nifty50 lost 366.85 points to 23,637.90 as of 12:02 PM.

Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services said that the market is likely to be influenced by the negative factors impacting FII flows and some positive domestic factors which can support the market.

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The market volatility saw a huge spike and reached 13.20 on Nifty50. The broader markets faced huge selling pressure, with both indices trading in red. Nifty Smallcap100 took a bigger hit, declining 2.50%, while Nifty Midcap100 fell 2.23%.

“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 stabilises. Domestically, the December auto numbers indicate that the much talked about urban demand deceleration is exaggerated. Buying will resume in these resilient domestic segments, supporting the market on declines,” said Vijayakumar.

HMPV SCARE IN INDIA

A major reason for today’s market crash can be attributed to the discovery of 2 HMPV cases in India, triggering a market selloff. Two babies were detected with HMPV in Bengaluru hospital with no international travel history on Monday.

In a brutal sell-off today, all sectoral indices on the Nifty traded in red, with no sectors managing to stay afloat with Nifty PSU Bank seeing the biggest fall, declining by 3.63%.

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Nifty Metal bore the brunt of the selling, plunging 2.98%, while Nifty Realty tumbled 2.77%. Nifty Financial Services Ex-Bank dropped sharply by 2.31%, and Nifty Media fell 2.21%. The auto sector wasn’t spared either, with Nifty Auto declining 2.05%. Banking stocks faced heavy pressure as Nifty Private Bank fell 1.89%, Nifty Bank dropped 1.88%. Financial services indices also took a hit with Nifty Financial Services 25/50 falling 1.78% and Nifty Financial Services declining 1.62%.

The selling extended to other sectors as well, with Nifty Oil & Gas dropping 2.45%, Nifty Midsmall Financial Services falling 2.58%, and Nifty Midsmall IT & Telecom declining 1.97%. Nifty FMCG lost 1.53%, Nifty Pharma fell 1.33%, Nifty Consumer Durables decreased 1.43%, and Nifty Healthcare Index dropped 1.06%. Nifty Midsmall Healthcare showed relatively lower losses but still declined 0.73%, while Nifty IT fell 0.60%.