Why Sensex fell 1000pts, Nifty below 24,550 on May 22? Check reasons here

Business Standard

22-05-2025

Why are Sensex, Nifty falling today? Indian benchmark indices – Sensex and Nifty – declined in trade on Thursday, May 22, 2025, primarily due to the global market weakness and renewed concerns over US fiscal health.
The BSE Sensex fell as much as 1.23 per cent or 1,004.95 points to 80,727.11. Similarly, the NSE Nifty50 dropped 1.22 per cent or 304.35 points to 24,509.10.
Broader markets, too, slipped. As of 11:30 AM, the Nifty SmallCap 100 index was down 0.40 per cent, while the Nifty MidCap 100 index slipped 0.68 per cent.
Kranthi Bathini, equity strategist at WealthMills Securities, explained that the market downturn is primarily driven by weakness in global markets. Added to this are concerns over US debt, which could have a ripple effect on other economies, and a natural correction after last month's rally—together forming the key triggers behind the current decline.
Echoing a similar view, Ravi Singh, SVP of retail research at Religare Broking said Indian benchmark indices started the day on a negative note, as global investor confidence weakened due US fiscal uncertainties and rising Treasury yields. Additionally, the earnings of Indian companies present a mixed outlook for fiscal year 2026.
Given this, here are the top reasons behind the stock market's fall:
Weak global cues
Asia-Pacific markets fell Thursday, tracking overnight declines on Wall Street as investors grew cautious over mounting US fiscal concerns.
At last check, Japan's Nikkei was down over 0.7 per cent, while the Topix slipped 0.5 per cent. South Korea's Kospi dropped 1.1 per cent, and Australia's ASX 200 was down 0.4 per cent.
On Wall Street, all three major indexes closed lower. Investors reacted negatively to a surge in Treasury yields, triggered by concerns that a new US budget bill would further stress the country's already major deficit.
The Dow Jones Industrial Average lost 1.91 per cent to 41,860.44. The S&P 500 shed 1.61 per cent to 5,844.61. The Nasdaq Composite slid 1.41 per cent to 18,872.64.
The 30-year Treasury bond yield last traded near 5.09 per cent, hitting its highest level since October 2023. Meanwhile, the 10-year benchmark yield stood at 4.59 per cent.
US debt woes
Gita Gopinath, first deputy managing director of the International Monetary Fund (IMF), has warned that the United States is running excessively large fiscal deficits and must urgently address its 'ever-increasing' debt burden. Her remarks were published in an interview with The Financial Times on Wednesday.
Gopinath's comments came shortly after Moody's downgraded the US sovereign credit rating, citing the federal government's inability to manage its growing $36 trillion debt and persistently high deficits. READ MORE
Most sectors fall
Barring Nifty Media, all other sectoral indices were in the red zone (trading negatively). Nifty Auto was the top laggard, down 1.4 per cent, followed by Nifty FMCG and IT, which declined 1.27 per cent and 1.11 per cent, respectively.
Other sectors including Pharma, PSU Banks, Private Banks, Consumer Durables, and Oil & Gas also posted losses in the range of 0.5 to 1 per cent.
Technicals
According to Singh, both the Nifty and Sensex witnessed selling pressure and are down nearly 1 per cent. Notably, the Nifty has begun trading below its strong support level of 24,800, which is now likely to act as a key resistance in the near-term.
Jigar S Patel, senior manager of equity research at Anand Rathi explained that Nifty recently broke below the key support level of 24,800, following a double top formation on the hourly chart, accompanied by bearish divergence. This breakdown triggered a sharp pullback of nearly 200 points.
'Looking ahead, the 24,800–25,000 zone will act as a critical resistance, while support is now seen in the 24,600–24,500 range. A sustained move above or below these levels will determine the next directional bias.' Patel added.