Indian stock markets experienced a sharp sell-off on Monday, with benchmark indices witnessing significant declines. The S&P BSE Sensex fell by 1,200 points to an intraday low of 78,035.88, while the NSE Nifty50 plunged over 2%, hitting 23,601.50.
At 1:34 PM, the Sensex was down by 1,179.72 points, and the Nifty50 tumbled 363.20 points to trade at 23,641.55. Broader market indices like Nifty Smallcap100 and Midcap100 also recorded steep declines of 2.60% and 2.40%, respectively.
Key Drivers Behind the Market Meltdown
Weak Global Cues and Rising Dollar
Global economic uncertainties continued to weigh on the markets. The dollar index surged to 109, while the 10-year US bond yield rose to 4.62%. Dr. V.K. Vijayakumar of Geojit Financial Services remarked, “FII flows are negatively impacted due to high yields and dollar strength, likely continuing until these factors stabilize.”
Sectoral Sell-Off Across the Board
No sector was spared in the sell-off. Nifty PSU Bank dropped 3.63%, followed by Nifty Metal and Realty, which declined by 2.98% and 2.77%, respectively. The downturn extended to broader indices, with widespread selling pressure hammering investor sentiment.
Virus Scare Adds to Panic
The detection of two Human Metapneumovirus (HMPV) cases in Bengaluru exacerbated market fears. Although experts have downplayed the virus’s potential impact compared to COVID-19, its emergence triggered a knee-jerk reaction.
Weak Q3 Business Updates
Disappointing business updates from key sectors such as banking and FMCG further deepened the market rout. According to analysts, weak performance by major companies has contributed to the overall bearish sentiment.
FPI Outflows and Rupee Depreciation
Foreign portfolio investor (FPI) outflows and a depreciating Rupee worsened the market outlook. Manish Jain of Mirae Asset Capital Markets noted, “The market lacks strong positive triggers while government capex spending remains uncertain, and consumption recovery is slow.”
Volatility Spikes Amid Investor Nervousness
The Nifty50 Volatility Index surged to 14.5, signaling heightened investor anxiety. Analysts warned that the markets could remain under pressure unless global conditions stabilize and domestic growth factors gain momentum.
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