SOURCE : NEW18 NEWS
Last Updated:May 13, 2025, 15:53 IST
Indian equity benchmarks were trading with deep cuts on Tuesday; Know 5 key reasons behind the stock market fall
Stock Market Crash Today
Why Is The Market Falling Today? Indian equity benchmarks opened lower on Tuesday, retreating from their strongest rally in over four years, as investors booked profits following a fragile ceasefire agreement between India and Pakistan over the weekend.
The BSE Sensex fell as much as 1,315 points, or 1.59%, to hit an intraday low of 81,114, while the Nifty50 declined 358 points, or 1.44%, to 24,565 around 2:20 PM.
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By the close of trade, the benchmark indices had slightly pared losses. The Sensex ended down 1,281.68 points, or 1.5%, at 81,148.22, while the Nifty50 settled 346.35 points lower, or 1.39%, at 24,578.35.
On the Sensex, Infosys, Eternal, Kotak Mahindra Bank, Power Grid, and ICICI Bank led the losses with declines of up to 2%. Meanwhile, Sun Pharma, IndusInd Bank, Bajaj Finance, Tech Mahindra, and Maruti were among the top gainers.
The decline comes a day after the Sensex and Nifty surged nearly 4% in a broad-based rally, triggered by easing geopolitical tensions and supported by buying from foreign and domestic investors. On Monday, FPIs bought equities worth Rs 1,246 crore, according to provisional data.
Key Reasons Why Is Stock Market Fell Today?
Profit Booking After a Strong Rally
After a nearly 4% surge in the Sensex and Nifty on Monday—primarily driven by the ceasefire agreement between India and Pakistan—markets saw a pullback on Tuesday as investors booked profits. The swift rise in valuations over a short period prompted caution among traders, leading to selling pressure in heavyweight stocks.
“It’s important to note that yesterday’s sharp 916-point rally in the Nifty was not driven by institutional flows. Combined FII and DII net buying stood at just Rs 2,694 crore. This indicates that the rally was largely triggered by short-covering and buying from high-net-worth individuals (HNIs) and retail investors. Institutional activity is likely to remain subdued in the near term, which may limit further upside,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
US-China Trade Tensions Ease
Investor sentiment globally turned optimistic after the US and China reached an agreement to reduce tariffs and strengthen economic cooperation. However, this development may not translate into immediate gains for Indian markets. Analysts had earlier expected prolonged US-China tensions to push global manufacturers toward supply chain diversification, with India as a potential beneficiary. As the trade conflict de-escalates, that expectation has weakened.
Crude Oil Prices Climb
Crude oil prices jumped to a two-week high on Monday, supported by improved global trade outlook. Brent crude rose to $64.74 per barrel, while WTI climbed to $61.77—both gaining more than 5.5% over the past two weeks. On Monday alone, both benchmarks advanced around 1.5%, marking their highest close since April 28. However, prices edged down by approximately 0.3% on Tuesday.
Rising US Treasury Yields
The yield on the US 10-year Treasury rose to 4.457%, up from around 4.25% in late March. Higher yields in US bonds make them more appealing to global investors, often prompting a reallocation of capital away from emerging markets like India—adding further pressure on Indian equities.
Global Cues
Asian markets tracked overnight Wall Street gains, as the temporary truce in the US-China trade conflict soothed recession fears. Japan’s Nikkei rose 2% to a new multi-month high, while Taiwan and China markets also gained. The broader MSCI Asia-Pacific index (ex-Japan) hit a six-month high. The S&P 500 and Nasdaq had jumped over 3% and 4.3%, respectively, on Monday.
- First Published:
May 13, 2025, 10:42 IST
