Last Updated:
The BSE Sensex plunged 1,162.12 factors to 79,020.08 in early commerce, whereas the NSE Nifty fell by 328.55 factors to 23,870.30.
Market capitalisation eroded by roughly Rs 3.76 lakh crore through the first half of the session. (Representaive picture/AI)
Market Crash Today: Indian fairness markets witnessed a pointy decline on Thursday as benchmark indices Sensex and Nifty tumbled, mirroring weak international cues following the US Federal Reserve’s hawkish stance on price cuts.
The BSE Sensex plunged 1,162.12 points to 79,020.08 in early commerce, whereas the NSE Nifty fell by 328.55 factors to 23,870.30. By 11 a.m., the Sensex had pared some losses however was nonetheless down almost 1,000 factors, buying and selling at 79,242.65, and the Nifty was 1% decrease at 23,946.30. Market capitalization eroded by roughly Rs 3.76 lakh crore through the first half of the session.
At 9:15 a.m., the Sensex was down 717.57 factors (0.89%) at 79,464.63, and the Nifty declined by 217.10 factors (0.90%) to 23,981.75. Almost all sectoral indices have been within the crimson, with steep declines in Nifty IT, Nifty Auto, and Bank Nifty, which fell almost 2%. The solely outlier was Nifty Pharma, buying and selling up by 1%.
Why Market Is Down Today?
Key Factors Behind the Indian Stock Market Crash
1. Hawkish US Fed Outlook:
The Federal Reserve dampened market sentiment by elevating its inflation forecast and signaling fewer price cuts for 2025. While it decreased the benchmark rate of interest by 25 foundation factors to 4.25–4.50%, the Fed’s projection of simply 50 foundation factors in cuts subsequent yr fell in need of expectations for a steeper discount of three–4 price cuts.
“Even although the speed lower of 25 bps was in tune with the market’s expectation, the indication of solely two cuts of 25 bps every in 2025 towards market expectation of three and even 4 cuts spooked the market leading to a pointy sell-off in Wall Street,” V Okay Vijayakumar, Chief Investment Strategist, Geojit Financial Services, mentioned.
Suresh Darak, Founder, Bondbazaar, mentioned, “The US Fed lower charges by 0.25% of their coverage yesterday bringing the coverage charges down between 4.25% and 4.5%. However, they lowered the speed lower steering for calendar yr 2025 from 4 cuts anticipated earlier to simply 2, citing that inflation nonetheless stays elevated. This caught the market without warning, resulting in US greenback strengthening vs different currencies and inflicting turmoil within the international inventory markets. The market now believes that charges might stay greater for longer.
“US 10 yr yields stay elevated and have crossed 4.5% after ~6 mth. It is fascinating to notice that the identical has shot up by 0.85% (is at ~4.50% vs 3.65% in Sep 2024), throughout the identical interval when Fed has lower coverage charges by ~1% (since Sep 2024),” Darak added.
Darak added that this transfer by the Fed is predicted to maintain different nations’ Central Bankers cautious of chopping charges materially, aside from exerting strain on their currencies. “Back house it could stay an essential consideration for the RBI when the MPC comes up for his or her assembly in Feb 2025.”
2. Heavy FII Selling:
Foreign institutional buyers (FIIs) bought shares price Rs 8,000 crore over the previous three periods, rekindling considerations of aggressive FII outflows much like October. So far in 2024, FIIs have offloaded Rs 2.94 lakh crore price of equities. On Wednesday alone, FIIs bought shares price Rs 1,316.81 crore, in keeping with trade information.
3. Weakening Rupee:
The rupee closed at a report low of 85 towards the US greenback, additional weighing on market sentiment. The Indian foreign money has depreciated by almost 2% in 2024. A widening commerce deficit in November exacerbated the strain on the foreign exchange market. The rupee dropped 12 paise to an all-time low of 85.06 towards the US greenback in early commerce on Thursday, as a hawkish tilt from the US Federal Reserve sparked a broad greenback rally.
The rupee was below extreme strain because the US greenback charged forward on hawkish FED outlook and flirted with a two-year peak at 108.04, whereas US 10-year bond yield rose to 4.51%, mentioned Anil Kumar Bhansali, Head of Treasury and Executive Director Finrex Treasury Advisors LLP.
4. US Dollar Strength and Rising Bond Yields:
The US greenback index rose to a two-year excessive of 108.086 following the Fed’s determination, reflecting sturdy demand for the dollar. Meanwhile, US 10-year Treasury yields surged to 4.52%, signaling greater borrowing prices globally.
Vijayakumar remarked, “The spike within the greenback index and 10-year bond yields are negatives for FII fund flows. However, these impacts are more likely to be momentary.”
The market’s near-term outlook hinges on international cues, FII exercise, and the trajectory of the rupee towards the greenback.
Investor Outlook
The sharp market sell-off on Thursday displays a mix of worldwide and home components, together with a hawkish stance from the US Federal Reserve, sustained FII promoting, and a weakening rupee. These components have triggered a wave of investor warning, eroding market capitalisation by trillions. While short-term volatility stays a priority, consultants recommend that the market’s restoration might depend upon future Fed selections, stabilising foreign money markets, and potential shifts in FII funding flows. Investors might want to keep alert to those developments for clearer route within the coming months.
Disclaimer: The views and funding ideas by consultants on this News18.com report are their very own and never these of the web site or its administration. Readers are suggested to verify with licensed consultants earlier than making any funding selections.
