Stock Market Crash Today: Sensex Falls Over 900 Pts From Day’s High, Nifty Slips Below 22,400 as India VIX Up

Indian stock market witnessed a sharp intraday reversal on Monday, October 12, as heavy selling in frontline stocks wiped out the gains recorded at the opening bell. The BSE Sensex dropped more than 900 points from its intraday high, while the Nifty 50 slipped below the crucial 22,400 mark, signalling renewed weakness in the domestic market.

Stock Market Crash: Sensex, Nifty Turn Red After Strong Opening; India VIX Crosses 15 Mark

The sell-off came after both benchmark indices began the session on a positive note, following a recovery in the previous trading session. However, buying momentum failed to sustain, with selling pressure returning across heavyweight stocks. Rising volatility added to investor concerns, as the India VIX climbed more than 7% and moved above the 15 level.

At around 11:35 am, the Sensex was trading at 71,978.36, down 493.97 points, or around 0.68%, from its previous close of 72,472.33. The index had opened at 72,771.32 and touched an intraday high of 72,884.25 before falling to a low of 71,898.17.

The Nifty 50 was trading at 22,378.60 around 11:40 am, declining 141.85 points, or approximately 0.63%, from its previous close of 22,520.45. The index opened at 22,593.20, reached a high of 22,651.10 and subsequently slipped to 22,370.65.

Why Is Stock Market Falling Today?

The latest decline comes amid concerns over persistent foreign institutional investor (FII) outflows and rising bond yields. These factors have added pressure on equity valuations at a time when investors are already monitoring global interest-rate expectations, currency movements and corporate earnings prospects.

Foreign investors have continued to withdraw money from Indian equities. Market data cited by analysts indicate that FIIs sold shares worth Rs 45,125 crore during the first six trading sessions of October. The outflow is almost equivalent to the Rs 45,536 crore of selling recorded throughout September.

The pace of foreign selling has become a key concern for the market, as sustained withdrawals can weigh on large-cap stocks and limit the ability of benchmark indices to maintain a recovery. While domestic institutional investors and retail participants can provide support during periods of weakness, their buying may not be sufficient to counter persistent overseas selling.

Rising bond yields have emerged as another factor influencing investor sentiment. Higher yields can make bonds more attractive relative to equities and put pressure on stock valuations, particularly when investors are uncertain about the outlook for interest rates and corporate earnings.

If US and Indian bond yields continue to rise, equity investors may become more selective and seek stronger earnings visibility, healthy cash flows and robust balance sheets before committing fresh money to stocks.

Sensex, Nifty Today Give Up Opening Gains

Monday's trading session highlighted the fragile nature of the recent market recovery. Both benchmarks opened higher but subsequently reversed course as selling intensified in large-cap stocks.

The Sensex started the session at 72,771.32, significantly above its previous close, but later retreated towards the 71,900 level. The Nifty also surrendered its opening gains and fell below 22,400, putting the spotlight on whether the indices can find support at lower levels.

The rise in India VIX, a gauge of expected market volatility, further reflected growing caution among traders. A sharp increase in the volatility index generally indicates that market participants are anticipating larger price swings, although it does not determine the direction of the next move.

"The market is going through a stage wherein external headwinds are dominating the domestic tailwinds. Elevated crude prices and high US bond yields will continue to impact the market. FIIs will continue to sell in the near-term and DIIs will continue to absorb the FII selling. This is the likely near- term market scenario," said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

"If crude declines sharply following favourable developments in the Middle East, the market can rally significantly from the current levels," said the expert.

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.