Why Market Is Down Today? Sensex Cracks 800 Points, Nifty Below 24,700; 5 Reasons Behind Today’s Fall

SOURCE : NEW18 NEWS

Last Updated:May 20, 2025, 15:11 IST

Indian equity benchmarks, Sensex and Nifty50, witnessed a sharp decline on Tuesday; Know what’s spooking investors today?

Stock Market Crash: Indian equity benchmarks, Sensex and Nifty50, witnessed a sharp decline on Tuesday, weighed down by weak global cues, profit booking, and cautious sentiment among institutional investors.

The BSE Sensex plunged over 800 points, hitting an intraday low of 81,250, while the NSE Nifty50 slipped below the 24,700 mark, reflecting broad-based selling across sectors.

Indian markets saw a broad-based sell-off on Tuesday, with auto and financial stocks leading the decline. Eicher Motors, Hero MotoCorp, Maruti Suzuki, Cipla, and Shriram Finance were among the top drags on the benchmark indices. All 13 major sectoral indices traded in the red.

Here are the key reasons behind the market sell-off:

Weak Global Cues

Asian markets slipped following a soft trend in Wall Street futures. South Korea’s Kospi traded lower, and US futures signaled a subdued start after hawkish commentary from the US Federal Reserve. Atlanta Fed President Raphael Bostic indicated that only one rate cut is likely in 2025, stoking inflation worries and dampening sentiment.

FII Outflows

Foreign Institutional Investors (FIIs) turned net sellers, offloading shares worth ₹525.95 crore on Monday. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said high valuations could lead to a phase of consolidation. “Institutional selling is likely on rallies as stretched valuations cap further upside,” he noted.

Uncertainty Around India-US Trade Talks

Commerce Minister Piyush Goyal concluded a four-day US visit with efforts underway to finalise a trade deal before new US tariffs kick in. “Markets are awaiting the next big trigger, possibly an India-US trade pact,” said Dharmesh Kant, Head of Equity Research at Cholamandalam Securities, speaking to Reuters.

Rupee Depreciation

The Indian rupee weakened by 13 paise to 85.55 against the US dollar, pressured by FII outflows and weak equity performance. Rising US 10-year bond yields continue to boost the dollar, weighing down emerging market currencies like the rupee.

Moody’s Cuts US Debt Outlook

Global rating agency Moody’s downgraded the outlook on US sovereign debt, citing deteriorating fiscal conditions. While not an immediate credit downgrade, the move has contributed to a risk-off mood across financial markets. “It’s creating an undercurrent of caution,” said Vijayakumar.

Covid-19 Concerns Resurface

Renewed Covid-19 cases in Asia—especially in Hong Kong and Singapore—have added to investor caution. In India, 164 new cases were reported since May 12, taking the active case count to 257. States like Kerala, Maharashtra, and Tamil Nadu are seeing the highest increases.

First Published:

May 20, 2025, 15:02 IST