Market Crashes For 5-Sessions In Row: Why Sensex Fell 817 Pts And Nifty Dipped 248 Pts On Monday, February 24?

Stock Market Crash: Indian stock market crashed on Monday, with Sensex and Nifty 50 toppling by more than 1% each. Both the benchmarks have erased key support levels of 75,000 and 22,600. Relentless selling, hawkish remarks of FOMC, and uncertainties due to Trump's tariff threat globally, are among key indicators to drag Indian stock market. IT stocks emerged as top losers, while banking and financial stocks added to woes. Although, the market witnessed broad-based selloffs across indices.

Sensex:

The 50-scrip benchmark opened below 75,000 levels to 74,893.45, and nosedived by as much as 817.09 points to hit an intraday low of 74,493.97. Currently, the benchmark was trading at 74,572.13, lower by 738.93 points or 0.98%

Stocks like HCL Tech, Zomato, Infosys, TCS, HDFC Bank, Bharti Airtel, IndusInd Bank, ICICI Bank, Tech Mahindra and Reliance Industries dragged Sensex heavily with downside of 1% to 3%.

Marginal gains was seen in M&M, Nestle, ITC, and Sun Pharma.

Of the total 3,867 stocks that traded on BSE, about 1,035 stocks advanced but a whopping 2,657 stocks declined, and the rest 175 stocks were unchanged. Of them, 233 stocks hit new 52-week lows, and 278 stocks touched lower circuits, at the time of writing.

BSE-listed companies market cap is struggling around Rs 398.35 lakh crore.

Nifty:

This 50-scrip benchmark opened at 22,609.35, and crashed by 247.55 points to hit an intraday low of 22,548.35. Currently, the benchmark traded near its day's low to 22,579.75, down by 216.15 points or 0.95%.

Bank Nifty slipped by 561 points, while Nifty Financial Services was down by 1.2%. However, Nifty IT index shed about 2.3% so far. Nifty Metal index also dragged with downside of 1.1%, while Nifty Oil & Gas extended its losses to drop by over 1%.

Midcap and smallcap indices were also down by 1% each. India's volatility index surged 1%.

That being said, this will be the fifth consecutive decline in Indian stock market, with BSE Sensex hitting its lowest level since early June 2024.

Why Market Is Falling On Monday?

As per Trading Economics data, Indian stock market tracked a fall in Asian peers, following a downbeat session on Wall Street on Friday. Traders are concerned about weak US economic data amid worries of potential rising inflation due to the impact of Trump's tariffs. The BSE Sensex is lingering at its lowest level since early June 2024, with almost all sectors trading in the red, led by tech, banking, financials, and realty. Persistent foreign fund outflows continued to pressure the index as market participants may prefer safer assets.

It added, caution grew ahead of crucial data from the US, including the PCE price indices and the second estimate of GDP growth, alongside speeches by several Fed officials.

Also, Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services explained that the market is facing headwinds from relentless FII selling and global uncertainties relating to Trump tariffs. The sharp surge in Chinese stocks is another near-term headwind. The 'Sell India, Buy China' trade may continue for some time since Chinese stocks continue to be attractive. The sharp spike in CBOE VIX indicates that volatility will continue for some time.

He added, in the US, long-term inflation expectations are rising and, therefore, the expected rate cut by the Fed is unlikely to materialise. The Fed might even turn hawkish, impacting US stock markets. If this happens and the US bond yields start declining, FIIs may cease to be sellers in India and may even resume buying. The near-term scenario is highly uncertain.

Lastly, Vijayakumar said, "The positive factor in our market is that the valuations of largecaps have turned fair and in certain segments like financials attractive, giving opportunities for long-term investors to buy. Even though the broader market valuations continue to be high, there are opportunities in select stocks in this segment."