D-St bleeds as Sensex drops 900 pts, Nifty below 24,800; Why markets fell?

Why did markets fall today? BSE Sensex index plunged 915 points to 81,261, while Nifty50 fell 1 per cent to 24,737

After two consecutive sessions of gains, Indian benchmark indices declined sharply, led by heavyweight stocks, mirroring subdued sentiment in Asian markets.

 

The BSE Sensex index plunged 915 points or 1.11 per cent in the intraday trade to hit a low of 81,261 during the day. The NSE Nifty50 fell 264 points, or 1 per cent, to 24,737. The indices registered their worst fall since May 20 this year. 

 

The broader market indices, however, outperformed the benchmarks. The Nifty MidCap was 0.37 per cent down while the Nifty SmallCap index was 0.03 per cent higher, respectively. Except for Nifty Realty, all sectors were trading lower on Tuesday, led by financial services and information technology (IT). 

 

 

Furthermore, the market breadth remained skewed in favour of sellers. About 1,500 stocks rose, 1,984 declined, while 194 remained unchanged on the BSE.   

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Why did markets see a sudden fall today? Key reasons behind the Sensex, Nifty fall today:

 

Risk-off trade in Asia: Most equity markets in Asia slipped in early trade on Tuesday, while the Dollar index continued to fal on concerns about widening fiscal deficit and risk to the economy. 

 

Japan's Nikkei 225 lost 0.5 per cent after the governor of the central bank said he anticipated raising interest rates in the coming months due to inflationary pressures. China's CSI 300 was down 0.35 per cent while South Korea's Kospi was 0.65 per cent lower. 

 

This comes after the US President Donald Trump, on Monday, extended the deadline for 50 per cent European Union tariffs until July 9. The European Union's chief trade negotiator said Monday he had good calls with Trump administration officials and that the EU was fully committed to reaching a trade deal by the July 9 deadline.

 

Wall Street remained closed on Monday, while the dollar index is on track for its lowest level since July 2023, losing over 7 per cent so far this year. 

 

In commodities, the US benchmark crude oil lost 23 cents to $61.30 per barrel. Brent crude, the international standard, fell 20 cents to $63.92 per barrel. 

 

Heavyweights drag market: The index heavyweights like HDFC Bank, ICICI Bank, Reliance Industries and Infosys were the top stocks dragging the benchmark Nifty50 on Tuesday. 

 

Meanwhile, UltraTech Cement was down 2.3 per cent, and Grasim was down 1.8 per cent during the day. Tata Consumer, Mahindra & Mahindra and ICICI Bank were all lower by 1.5 per cent, each.  

 

Key levels to watch: The Nifty index was still placed near the psychological resistance level of 25,000, Hrishikesh Yedve of Asit C. Mehta Investment Interrmediates Ltd. said in a note. A sustainable move above 25,000 could drive the Nifty towards 25,200–25,250 levels in the short term, and on the downside, 21-Day Exponential Moving Average (21-DEMA) support is placed near 24,530, he said. "As long as the index holds above this level, a buy-on-dips strategy should be adopted."