₹12 trillion wiped out: Why are Sensex, Nifty falling today? Key reasons

Stock market crash today: India VIX, the fear gauge index, spiked more than 21 per cent to go past the 22 mark, indicating higher volatility in the near term

Stock market crash today reasons: Stock market benchmark indices Sensex and Nifty 50 snapped their three-day winning run today as they fell sharply due to soaring crude prices and hawkish Fed commentary. Also, selling in the index heavyweight HDFC Bank dragged the markets. The BSE Sensex index traded 2,400 points or 3.12 per cent lower at 74,309 around 3PM. Likewise, the Nifty index tumbled 741 points or 3.12 per cent to 23,036.

 

Sectoral participation was negative as all the indices traded deep in the red. The Nifty Bank index plunged 3 per cent, followed by Auto, Realty, and Consumer Durables -- each down more than 2 per cent. The broader markets were also hit hard, with midcap and smallcap indices sinking 3 per cent.

 

 

Market breadth was weak as only 481 stocks advanced and 2,719 stocks declined on the NSE. From the Nifty 50 pack, only one stock (ONGC) gained while 49 declined.  India VIX spikes 21%

 

India VIX, the fear gauge index, spiked more than 21 per cent to go past the 22 mark, indicating higher volatility in the near term.

 

Today's fall erased more than ₹12 trillion from the Street. The total market capitalisation of all the BSE-listed companies stood at ₹426.6 trillion as against the previous session's all-India market capitalisation of ₹438.6 trillion.

 

Stock market crash today: Key reasons

 

Oil prices rise: Oil prices rose as much as 3 per cent after Iran attacked several energy facilities across the Middle East ​following a strike on its South Pars gas field, a major ​escalation in Tehran's war with the US and Israel. Brent futures were up $3.69, or 3.44 per cent, ‌to $111.07 by 0142 GMT, while US West Texas Intermediate crude rose $2.29, or 2.38 per cent, to $98.61.

 

VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said that the uncertainty surrounding the war has turned worse with Israel hitting the world’s largest LNG refinery in Iran. Brent crude has shot up to $111.

 

"This is bad news for oil and gas importers like India. If Brent remains above $110 for an extended period of time, that will have negative implications for India’s macros. India’s GDP growth and corporate earnings in FY27, too, will be impacted," he said.

 

Fed holds rate: The US Federal Reserve has kept its key interest rate unchanged for the second consecutive time. The FOMC decided to hold its rate in the range of 3.5 to 3.75 per cent. In addition, the Fed has projected only one rate cut this year. 

 

Jerome Powell highlighted the increasingly uncertain outlook for the US economy and inflation as West Asia remains on the boil.

 

HDFC Bank selloff: HDFC Bank shares crashed 8 per cent after its part-time Chairman and independent director, Atanu Chakraborty resigned. According to the NSE Indexogram, HDFC Bank accounts for more than 11 per cent weightage in the 50-share pack. As of 10AM, HDFC Bank shares were trading with a cut of 4.7 per cent at ₹804.

 

Meanwhile, former CEO Keki Mistry has been appointed interim part-time chairman of the country's largest private sector bank. 

Profit booking after three-day rally: Today's fall came after a three-day rally. In the past three sessions, the Sensex jumped 2,140.21 points or 2.87 per cent, while the Nifty 50 index added 626 points or 2.7 per cent. Amid persistent global uncertainties and elevated market volatility, Hitesh Tailor, research analyst, Choice Equity Broking, advised investors to maintain a disciplined and selective approach. 

 

"Focusing on fundamentally strong stocks during market corrections may be a prudent strategy. Fresh long positions should ideally be considered only after the Nifty convincingly crosses and sustains above the 25,000 mark, as this would indicate improving sentiment and the potential emergence of a stronger bullish trend," he said.

 

Global markets fall: The Indian markets fell in line with weak global trends. In Asian markets, South Korea's benchmark Kospi, Japan's Nikkei 225 index, Shanghai's SSE Composite index and Hong Kong's Hang Seng index were trading significantly lower.

 

Overnight, Wall Street indices touched a new closing low for the year after the Fed policy and commentary in interest rates. The S&P 500 and Nasdaq tumbled 1.36 per cent and 1.46 per cent, respectively, while the Dow lost 1.63 per cent.