Stock market crash today: BSE Sensex and Nifty50, the Indian equity benchmark indices plunged in trade on Monday. While BSE Sensex went below 85,300, Nifty50 dipped to below 25,850 levels. BSE Sensex ended the day at 84,299.78, down 1,272 points or 1.49%. Nifty50 closed the day at 25,810.85, down 368 points or 1.41%.
This decline occurred amidst varying signals from regional markets and was primarily driven by major index contributors such as Reliance Industries, IT companies, and financial institutions.
The combined market value of all companies listed on the BSE decreased by Rs 3.96 lakh crore, reaching Rs 473.97 lakh crore, according to an ET report.
Major contributors to the Sensex’s decline included Reliance Industries, ICICI Bank, HDFC Bank, and Axis Bank, which collectively pulled the index down by 535 points.
Other significant losers were Bharti Airtel, M&M, SBI, TCS, Infosys, and Tata Motors.
Most sectoral indices, including Nifty Bank, Auto, Financial Services, IT, Media, Realty, Healthcare, and Oil & Gas, fell by up to 1.6%. The India VIX, a measure of market volatility, rose by 6.3% to 12.7.
In contrast, the Nifty Metal index gained 1.5%, continuing its positive trend following China’s announcement of measures to stimulate its slowing economy. The top gainers in the metal index were NMDC, Hindalco, and SAIL.
Why BSE Sensex, Nifty have crashed today
Several key factors contributed to the market’s decline:
1) Foreign Institutional Investors (FIIs) have shifted their attention to the Chinese market in response to a series of economic stimulus measures introduced by the Chinese government. The CSI300 index, which represents blue-chip companies, increased by 3.0%, while the Shanghai Composite experienced a substantial 4.4% surge, building on the previous week’s 13% rally. Furthermore, the Chinese central bank revealed plans to reduce mortgage rates for existing home loans, further bolstering investor confidence in the Chinese market.
“Market is likely to move into a consolidation phase in the near-term. One significant factor that is influencing foreign portfolios is the outperformance of the Chinese stocks which is reflected in the massive surge in the Hang Seng index by around 18 % in September. This surge has been triggered by hopes of revival in the Chinese economy in response to the monetary and fiscal stimulus announced by the Chinese authorities,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
2) Geopolitical tensions, particularly the escalation of Israeli strikes across Lebanon, have added uncertainty to global markets. Although oil prices have been kept in check by potential supply increases, the ongoing Middle East conflict has led to heightened concerns over energy supplies. Rising crude oil prices have further impacted market sentiment, putting pressure on the Indian equity market due to India’s dependency on oil imports.
3) Investors are cautiously awaiting a series of key events this week, starting with Federal Reserve Chair Jerome Powell’s speech. Throughout the week, several Fed officials are scheduled to speak, and markets are closely monitoring for indications of future monetary policy decisions. Important data points, such as job openings, private hiring numbers, and ISM surveys on manufacturing and services, are also expected to be released.
The US payrolls report, due at the end of the week, could influence the Federal Reserve’s decision on whether to implement another significant interest rate cut in November. Recent data showing moderate increases in consumer spending and easing inflation pressures have further raised expectations of a substantial rate cut at the Fed’s upcoming meeting. Futures imply around a 53% chance the Fed will ease by 50 basis points on November 7.
4) Foreign Institutional Investors (FIIs) turned net sellers, offloading equities worth Rs 1,209 crore on September 27. Despite this, their total inflows for September remained strong, exceeding Rs 57,000 crore for the month.
“FIIs may continue to sell in India and shift more money to better-performing markets. However, this selling is unlikely to impact the Indian market significantly since the massive domestic money can easily absorb whatever the FIIs are selling,” V K Vijayakumar said.