Why Is Stock Market Falling Today? Sensex Down 700 Points, Nifty Below 24,550; Key Reasons
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Benchmark stock market indices fell sharply during the afternoon trading session after a shaky start on Tuesday
Why Is Market Falling Today? Benchmark indices Sensex and Nifty50 traded sharply lower on Thursday, dragged down by financials, IT, and rate-sensitive sectors. The decline comes ahead of the Reserve Bank of India's (RBI) policy decision and amid rising concerns over global trade tensions and U.S. fiscal challenges.
At 1:13 pm, the BSE Sensex had fallen 740.82 points to 80,632.93, while the NSE Nifty50 dropped 187.65 points to 24,528.95. All Nifty sectoral indices traded in the red as volatility spiked during the session.
Heavyweight banking, financial, and IT stocks led the decline, with Bajaj Finserv, Axis Bank, Bajaj Finance, HDFC Bank, ICICI Bank, and TCS all down over 1%. Meanwhile, Adani Group shares, including Adani Enterprises and Adani Ports, slipped after a Wall Street Journal report alleged links between Adani entities and Iranian liquefied petroleum gas (LPG) shipments.
Key Factors Behind the Fall
Foreign Fund Outflows: Continued selling by Foreign Institutional Investors (FIIs) pressured Indian equities. On Monday alone, FIIs offloaded shares worth Rs 2,589.47 crore.
Crude Oil Price Spike: Brent crude rose 0.57% to USD 65 per barrel amid restrained OPEC+ output hikes and escalating geopolitical tensions. As India imports over 85% of its oil, this trend raises domestic inflation concerns.
Heightened Geopolitical Risks: Rising tensions in Eastern Europe and the Middle East added to market jitters. Ukrainian President Volodymyr Zelenskyy threatened further drone attacks on Russia, while Iran reportedly signalled it may reject US nuclear proposals.
Global Trade Uncertainty: Trade tensions between the US and China resurfaced after Donald Trump accused Beijing of violating a tariff rollback deal. The US is also considering doubling tariffs on steel and aluminium to 50%, sparking fresh worries over global trade flows.
US Jobs Data in Focus: Markets await US non-farm payrolls data later this week, expected to show around 130,000 new jobs in May with unemployment steady at 4.2%. Surprises here could sway global investor sentiment.
RBI MPC Meet in Spotlight: Domestically, investors are keenly watching the RBI's Monetary Policy Committee (MPC) meeting, which concludes on June 6. While no rate change is widely anticipated, the central bank's stance on inflation and liquidity will be closely tracked.
Rupee Weakness: The rupee weakened by 10 paise to 85.49 against the US dollar, pressured by higher crude prices, FII outflows, and broader market volatility ahead of the RBI policy decision.
Global Economic Data: Besides US jobs data, investors await updates on American manufacturing and services activity to gauge the strength of the world's largest economy and future Federal Reserve moves.
First Published:
June 03, 2025, 14:29 IST
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