Sensex dives 931 points after hitting all-time high, Nifty settles at 21,150: Key reasons behind the fall

Indian equity benchmarks on Wednesday fell sharply after scaling their fresh lifetime peaks. The 30-share BSE Sensex pack slumped 931 points or 1.30 per cent to settle at 70,506 while the broader NSE Nifty index moved nearly 303 points or 1.41 per cent down to end at 21,150 level. The correction in domestic benchmarks could be related to profit booking at higher levels and a rise in Covid-19 cases in the country.

Earlier in the day, Sensex jumped 476 points to hit an all-time high of 71,913 and Nifty touched its fresh record peak of 21,593. The massive drop in the stock indexes came during a fag-end sell-off.

Such was the fall in the domestic bourses that around Rs 9 lakh crore of BSE market capitalisation (m-cap) was wiped out. Investor wealth, as suggested by the BSE m-cap, fell Rs 9.11 lakh crore to Rs 350.01 lakh crore compared with a valuation of Rs 359.11 lakh crore recorded in the previous session.

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Here are the key reasons behind the stock market fall:

Bank, metal & auto stocks tank

All 15 sector gauges -- compiled by the NSE -- closed in the red. Sub-indexes Nifty PSU Bank, Nifty Metal and Nifty Auto underperformed the NSE platform by falling as much as 4.04 per cent, 3.82 per cent and 2.28 per cent, respectively.

Rise in Covid-19 cases

India saw an uptick in Covid-19 cases, with 614 fresh infections recorded in the past 24 hours, the highest since May 21, according to the Union Health Ministry data. The surge in cases is due to the Covid sub-variant JN.1, which was first detected in Kerala.

Before this, Karnataka asked those above 60-years of age, with comorbidities, and symptoms of cough, phlegm and fever to mandatorily wear face masks, in the wake detection of a case of the Covid sub-variant in neighbouring Kerala.

The recent rise in Covid-19 cases may be serving as a convenient excuse for some investors to exit, said Parth Nyati, founder of Tradingo.

Crude oil rates

Oil prices rose more than a dollar a barrel after attacks by Yemen's Iran-aligned Houthi militants on ships in the Red Sea disrupted maritime trade and forced more companies to reroute vessels.

FII-DII data

Foreign institutional investors (FIIs) sold Indian shares on a net basis today, offloading Rs 1,322.08 crore, while domestic institutional investors (DIIs) bought shares worth Rs 4,754.34 crore.

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