Indian benchmark equity indices, the Sensex and Nifty50, fell more than 1.5% on Monday after opening higher, with private and state-owned banks, as well as consumer stocks, leading the loss due to dismal quarterly updates from big corporations. The market decline coincided with the finding of three instances of Human Metapneumovirus (HMPV) in the country.
The BSE Sensex fell more than 1,400 points, going below 77,900, while the Nifty50 shed more than 400 points, plunging below 23,600.
The market value of all BSE-listed companies fell by Rs 11.85 lakh crore to Rs 437.93 lakh crore.
At the closing, the 30-share Sensex fell 1,258.12 points, or 1.59%, to 77,964.99. Today, the index traded between 79,532.67 and 77,781.62.
Mirroring the Sensex, the NSE Nifty50 fell 388.70 points, or 1.62 per cent, to 23,616.05. On Monday, the Nifty50 peaked at 24,089.95 and fell to 23,551.90.
All sectors saw selling pressure, with the Nifty Metal index falling 2.66%, the Nifty PSU Bank index falling 3.35%, and the Nifty Auto index falling 1.68%, reflecting the market’s overall weakness.
Vinod Nair, Head of Research at Geojit Financial Services, attributed the sudden sell-off to a “sell-on-rally sentiment” fueled by the strong US currency and high stock valuations. He predicted that the markets would remain flat until third-quarter earnings provide new guidance .Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, identified external macroeconomic concerns as another issue. “With the dollar index at 109 and the 10-year Treasury bond rate at 4.62%, the global situation remains unfavourable. FIIs are likely to keep selling until these factors stabilize,” he said.
Reasons for Today’s Market Crash
While investors were already preoccupied with following corporate earnings and the forthcoming Q3 results season, as well as ongoing geopolitical concerns, the announcement of HMPV instances in India served as an unanticipated catalyst for the market decline.
The Union Health Ministry reported the finding of two HMPV cases in Karnataka, which were discovered during routine respiratory viral pathogen surveillance. Both incidents were infants: one, a 3-month-old female who was discharged after recuperating, and the other, an 8-month-old boy who is still recovering.
The Ministry stressed that there is no cause for concern, as both incidents were discovered as part of continuing surveillance. It noted that the scenario in China during the flu season is not unique and that the rise is caused by common diseases such as the influenza virus, RSV, and HMPV.
As a precaution, the Ministry intends to increase HMPV testing and has tasked the Indian Council of Medical Research (ICMR) with year-round monitoring of HMPV trends in India.
