Why did stock market crash today? Which stocks took the hardest hit? Read in detail
Stock market update: The Indian stock market witnessed a sharp decline in early trading hours on Friday, weighed down by IT, telecom, and auto stocks. By 10 AM, the BSE Sensex had plunged by 1,014.08 points or 1.36%, settling at 73,598.35. Similarly, the NSE Nifty dropped by 300.45 points or 1.33%, reaching 22,244.60.
Reasons behind the market decline
Several factors contributed to the market crash, including weak earnings from Indian banks, global index rebalancing, foreign fund outflows, and rising US bond yields. Additionally, concerns over tariff policies announced by US President Donald Trump added to investor uncertainty.
According to market analysts, the sharp sell-off was triggered by multiple economic factors, including:
Weak bank earnings: Recent financial reports from major Indian banks failed to meet market expectations, leading to investor concerns about the banking sector’s profitability.
MSCI rebalancing: The rejig in the MSCI index led to institutional investors reshuffling their portfolios, increasing volatility in the Indian markets.
Foreign Institutional Investors (FIIs) outflow: FIIs have been shifting their investments from Indian equities to Chinese markets, further pressuring Indian stocks.
Rising US bond yields: Higher yields in the US bond market make American assets more attractive, prompting investors to pull out funds from emerging markets like India.
Strengthening US dollar: The dollar index surged to 107.35 against a basket of six major currencies, making foreign investments costlier for emerging markets like India.
Stocks that took the hardest hit
Among the Sensex stocks, IndusInd Bank recorded the steepest decline, tumbling 5.19% to trade at ?992. This was followed by Tech Mahindra, which fell by 4.57% to Rs 1,514.70, and Mahindra & Mahindra, which dropped by 4.32% to Rs 2,608.15.
Interestingly, Reliance Industries was the sole gainer among the 30 Sensex stocks, inching up 0.40% to trade at
Rs 1,211.85.
Sectoral performance
The slump was widespread, with IT, telecom, and auto stocks leading the downturn.
Nifty Midsmall IT & Telecom Index: Dropped 3.70% to 8,783.10, weighed down by Zensar Technologies (-5.55%), Persistent Systems (-5.10%), and Tata Technologies (-4.49%).
Nifty IT Index: Fell by 3.54% to 37,567.75, with Persistent Systems (-5.10%), Tech Mahindra (-4.74%), and MphasiS (-4.23%) dragging the index down.
Nifty Auto Index: Declined by 2.97% to 20,701.90, affected by Mahindra & Mahindra (-4.40%), Ashok Leyland (-4.02%), and Samvardhana Motherson International (-3.86%).
Opening bell shock: A rough start for markets
The Indian stock market opened on a bearish note, reflecting global economic concerns and investor caution. At 9.20 am IST, the Sensex had already plummeted by 746.12 points or 1%, reaching 73,866.31. The NSE Nifty also began the session on a weak note, declining by 221.15 points or 0.98%, settling at 22,323.90.
IndusInd Bank led the losses upon opening, falling 4.07% to Rs 1,003.75. Mahindra & Mahindra followed with a 2.86% drop to Rs 2,648.00, while NTPC lost 2.61%, trading at Rs 307.50. At the time, all 30 Sensex stocks were in the red.
Sector-wise, the Nifty Midsmall IT & Telecom Index led the decline, falling 2.52% to 8,890.50, followed by Nifty Metal (-2.10%) at 8,159.80 and Nifty Auto (-1.98%) at 20,913.80.
Outlook: What lies ahead?
Market analysts caution that volatility is likely to persist in the coming sessions due to ongoing global economic uncertainties. The trajectory of US interest rates, foreign fund flows, and geopolitical developments will play a crucial role in shaping market movements.
Investors are advised to adopt a cautious approach, focusing on fundamentally strong stocks and avoiding panic-driven decisions. Experts suggest monitoring global cues closely and diversifying portfolios to mitigate risks.
- With inputs from agencies
