Sensex falls 900 pts, Nifty below 24,700; why are markets down today?

Why are markets falling? Rising Covid-19 cases in Asia, including India, Moody's downgrade of US ratings, and fall in US futures are some of the reasons why markets are down today

Why is market down today: Indian stock markets today witnessed a sudden selling pressure in the afternoon session on Tuesday, May 20, 2025. The BSE Sensex index fell 906 points in the intraday trade to hit a low of 81,154. It ended at 81,186, down 873 points or 1.06 per cent.

 

The NSE Nifty50, too, fell below the 25,000-mark to hit a low of 24,670, down by 276 points. The 50-stock index closed at 24,684, down 262 points or 1.05 per cent.

 

In the broader markets, the Nifty MidCap and the Nifty SmallCap indices, too, slipped 1.6 per cent and 1 per cent, respectively.

 

 

The market breadth favoured sellers with nearly 2,517 stocks in the red on the BSE as against 1,455 advancing stocks. About 132 stocks were unchanged at close. TRACK TODAY'S MARKET ACTION

 

Sectoral indices fell like a pack of cards on the NSE today with the Nifty Auto index dropping 2 per cent, the Nifty Financial Services, FMCG, Pharma, PSU Bank, Private Bank, and Realty indices 1 per cent each, and the Nifty Metal index 0.5 per cent.

 

Among stocks, Eternal, Hero MotoCorp, Bajaj Auto, Shriram Finance, Eicher Motors, Maruti Suzuki, Cipla, M&M, Power Grid, Trent, Bajaj Finance, Tata Consumer, Nestle India, Jio Financial Services, Ultratech Cement, Bajaj Finserv, Tata Motors, Asian Paints, HUL, Sun Pharma, Tech M, Adani Enterprises, and SBI fell in the range of 1 per cent to 3.7 per cent.

 

Why are markets down today? Key reasons behind Sensex, Nifty fall on Tuesday:

 

US Futures fall; Moody’s downgrades clouds outlook:

Futures tied to the US markets were edging lower today, suggesting a likely weak trade on Wall Street later today. The Dow Jones futures were down 0.14 per cent, S&P500 futures 0.28 per cent, and the Nasdaq futures 0.36 per cent.

 

Stock markets in the US witnessed a choppy on Monday as well, with US Treasury yields firming up lately, after Moody's downgraded the US government’s credit rating last Friday. The downgrade, as per analysts, underscores potential fiscal challenges for the US government.

 

Rising Covid-19 cases in India, other Asian countries:

India has seen a sudden increase in coronavirus (Covid-19) cases over the past few days. Though the cases are not yet at alarming levels, the fast pace of rising Covid-19 cases has shocked investors.

 

India recorded 257 active infections reported nationwide as on May 19, as per the Ministry of Health and Family Welfare (MoHFW).

 

Elsewhere in Asia, coronavirus cases in Singapore jumped to over 14,000 in early May 2025, up from 11,100 cases in the last week of April. The rise in Covid-19 cases across Singapore and Hong Kong has been linked to the LF.7 and NB.1.8 variants, sub-lineages of the broader JN.1 variant of Omicron. India has maintained that there is no presence or spread of JN.1 variants within the country so far.

 

China cuts loan prime rate:

The People's Bank of China cut the 1-year loan prime rate to 3 per cent from 3.1 per cent, and the 5-year loan prime rate to 3.5 per cent from 3.6 per cent to aid the economy. This comes at a time when trade tensions with the US threaten to derail the already sluggish Chinese growth.

 

Hong Kong's Hang Seng index added 1.49 per cent today to close at 23,681.48, while mainland China's CSI 300 gained 0.57 per cent to close at 3,899.37.

 

Strength in the Chinese economy could derail India's 'China+1' play. 

Delay in India-US trade deal

According to Vinod Nair, head of research at Geojit Investments Limited, the selling pressure in Indian stock markets was broad-based as participants awaited more clarity on the India-US trade agreement.  "Given the current premium valuations and delays in the trade deal, we foresee a phase of short-term consolidation, which may lead FIIs to scale back their positions in the domestic market," he said.  Notably, FPIs/FIIs sold India stocks worth ₹526 crore on Monday, May 19, a first since Mat 13, 2025. This was also the third occasion when foreign investors sold domestic stocks in the month of May.  Meanwhile, Commerce Minister Piyush Goyal is in the US. India hopes to strike a trade deal with the US before US President Donald Trump's 90-day tariff pause deadline ends in July. 

Nifty share price: Technical levels to watch

The negative divergence on the daily RSI has added to the bearish sentiment on the Nifty index. "If it sustains below 24,700, the correction could extend further, potentially towards 24,300. However, if the index moves back above 24,700, it may signal a return to a consolidation phase," said Rupak De, senior technical analyst at LKP Securities.