Sensex crashes 850 points: What's behind today's market decline
What's the story
The Indian stock market witnessed a major selloff on Thursday, with the Sensex crashing over 850 points and the Nifty 50 hitting an intraday low of 25,567.75. The broad-based selloff affected mid- and small-cap indices as well, with both BSE mid- and small-cap indices declining by over half a percent each. Investors lost nearly ₹4 lakh crore as the total market capitalization of BSE-listed companies fell from ₹472 lakh crore to around ₹468 lakh crore during trading hours today.
Market factors
Why is the market witnessing a selloff?
The current market downturn can be attributed to profit booking after recent gains. On Wednesday, both Sensex and Nifty 50 had gained for the third consecutive session. With major macro triggers like the Budget, India-US deal, RBI policy behind us and Q3 results season over, the market is witnessing stock-specific action amid a lack of fresh domestic triggers.
External influences
Fed outlook and rising crude oil prices affect market sentiment
The minutes of the US Federal Reserve's January meeting revealed a divide among officials on future policy direction. Some see room for further easing if inflation cools, while others are prepared to tighten policy if price pressures persist. Meanwhile, rising crude oil prices have also affected market sentiment. WTI crude futures rose 4.6% to $65.19 per barrel while Brent jumped 4.35% to $70.35 per barrel in the last session and continued its upward trend today.