Closing Bell: Sensex Falls 1,045 Points, Nifty Hits 52-Week Low; Why Did Stock Market Crash Today?

Brutal day for stock market today as the Thursday session recorded a sharp sell-off with sensex & nifty suffering under heavy selling pressure across sectors. Sensex plunged more than 1,100 points, while the Nifty 50 slipped sharply below the 22,300 level.

At the closing bell today BSE Sensex settled 1.44% or 1045 points lower at 71,593 while Nifty 50 slipped 371 points or 1.64% to end the day at 22,231.

The broader market was also under pressure, with selling pressure not just in large-cap stocks but into the mid-cap and small-cap segments as well. The sharp decline wiped out more than Rs. 8 lakh crore in investor wealth. There was a 10% surge in the India VIX due to volatility and nervousness in market participants.

Metal, Realty Stocks Bear The Brunt

Among the sectoral indices, Nifty Metal and Nifty Realty were among the biggest casualties, each falling more than 3%.
The Nifty Oil & Gas index also fell sharply, losing more than 2.5% as concerns over crude oil prices and inflation weighed on sentiment.

Several heavyweight stocks also contributed to the market decline. Adani Green Energy and Adani Enterprises were among the major losers, falling sharply during the session. ITC, Reliance Industries and Power Grid also were under pressure.
However, the entire market was not in the red. Some IT stocks, including TCS and HCL Technologies, were in green due to expectations around the upcoming second-quarter earnings season.

Why Did The Stock Market Fall Today?

One of the top factors impacting the sentiment was the recent shift in expectations around RBI monetary policy. The central bank yesterday announced a 0.25% increase in repo rate and the tightening stance have increased concerns among investors about borrowing costs.

"Global markets sell-off had a bearing on Indian equity indices as soaring US bond yields coupled with a sharp spike in international crude oil prices to over $102 a barrel, pushed the benchmark Nifty to a fresh 52-week low. Intense FII selling of domestic shares and anticipated further rate hikes by the RBI are also sending jitters to local investors, as higher interest rates will hurt long-term growth prospects." said Ankur Punj, Managing Director, Equirus Wealth

Global bond markets are also a major concern for investors. US Treasury yields have moved sharply higher, with the 30-year US Treasury yield reaching a multi-year high, crossing 5.7% and pulling foreign capital away from India.

FII Selling Impacting the Market

Continued foreign institutional investor (FII) selling has added another layer of pressure to the domestic equity market.
"Foreign investor flows are likely to remain influenced by the relative attractiveness of Indian equities versus global markets, US bond yields, currency movements and broader risk sentiment. A moderation in global yields, greater clarity on the interest-rate trajectory and improving risk appetite could support a more favourable environment for emerging-market flows." said Pranay Aggarwal, Director & CEO, Stoxkart

Market Outlook Ahead

"While near-term volatility may remain elevated, earnings fundamentals continue to be an important factor for the medium-term market outlook. Sectors with relatively resilient demand, healthy balance sheets and sustainable earnings visibility may be better positioned to navigate periods of macroeconomic uncertainty. Investors should assess these factors in the context of their individual risk profiles and investment objectives rather than taking short-term market movements in isolation." Agarwal further explained.

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