Sensex tanks 800 points: 3 reasons why stock market is falling today
The stock market fell sharply in early trade on Monday, with benchmark indices dropping 1% as multiple factors weighed on investor sentiment.
The S&P BSE Sensex lost 676.83 points to 74,634.23, while the NSE Nifty50 fell 203.05 points to 22,592.85 as of 9:40 AM. IT stocks were the worst hit, with HCLTech falling nearly 3%.
Market experts point to three key reasons behind today’s decline.
Foreign Institutional Investors (FIIs) have been continuously selling Indian stocks, adding pressure to the market.
Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “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 remain attractive.”
He also pointed out that volatility in the US markets is rising. “The sharp spike in CBOE VIX indicates that volatility will continue for some time. In the US, long-term inflation expectations are rising, making an expected rate cut by the Fed unlikely. The Fed might even turn hawkish, impacting US stock markets. If this happens and US bond yields start declining, FIIs may stop selling in India and might even resume buying.”
Vijayakumar added that despite the current uncertainty, large-cap stocks have become fairly valued, especially in the financial sector, creating buying opportunities for long-term investors.
IT stocks lead the fall – Technology stocks were the biggest drag on the markets today, with the Nifty IT index falling 2.20%. Weakness in major IT companies spilled over into other sectors, pulling down market sentiment.
Nifty Media fell 1.61% and Nifty Realty dropped 1.19%. Banking indices also felt the heat as Nifty Bank declined 0.89%, while both Nifty PSU Bank and Nifty Private Bank fell 0.78% each.
The Nifty Financial Services indices slipped between 1.02-1.04%. Nifty Metal shed 0.82%, while Nifty FMCG lost 0.49%.
Among the few gainers, Nifty Pharma stood out with a modest rise of 0.23%, while Nifty Auto remained relatively stable with a marginal dip of 0.02%.
Since IT companies have a significant weight in the main index, their decline has had a big impact on today’s market weakness.
US inflation concerns – Global market trends have been weighing on Indian stocks. The Dow Jones recently had one of its worst days in the past few months, raising concerns among investors.
Kranthi Bathini, Director – Equity Strategy at WealthMills Securities, said, “US inflation worries and weak global cues have been dragging down the Indian market in the short to medium term. The Trump administration’s decision to increase tariffs on BRIC countries, including India, has added extra pressure.”
He explained that from a technical perspective, the Nifty falling below the 22,800 mark pushed markets into a negative zone, creating additional selling pressure.
Despite the current market weakness, experts believe this could be a buying opportunity for long-term investors.
Bathini said, “The current downturn and signs of a bear market create opportunities for investors. Those with a long-term horizon of one to three years can start picking up quality large-cap stocks at lower prices.”