Sensex dives 645 points; Nifty slips to 24,610 level: Key factors behind today's fall

The Indian stock market experienced a substantial decline on Thursday, with benchmark BSE Sensex plummeting 645 points to close at 80,952, while the broader NSE Nifty fell 204 points to settle at 24,610. This sharp downturn occurred as investors remained uncertain about the resolution of tariff issues between the United States and major economies, including India. The lack of clarity on these trade negotiations has left investors wary, as they anticipate potential impacts on global trade dynamics and economic growth.

Adding to the market's woes were concerns surrounding US President Donald Trump's tax and spending bill, which has sparked fears of increased US debt and potential economic slowdown. Such apprehensions have negatively impacted market sentiment globally, contributing to the bearish outlook on Dalal Street. The possibility of a prolonged economic slowdown in the US has raised alarms among investors, who are closely monitoring the situation for any signs of policy shifts.

Geopolitical tensions have further exacerbated market anxieties, particularly with reports indicating that Israel is preparing for a possible military strike against Iranian nuclear sites. This development has added to the volatility, as investors react to the potential implications for global stability. The conflict between Israel and Iran could have far-reaching consequences, affecting oil prices and regional security, which in turn could influence global markets.

The lack of positive market triggers allowed bearish trends to dominate the session. A steady rise in Covid-19 cases in several Southeast Asian nations has led investors to engage in heavy selling on Dalal Street, driven by concerns over potential disruptions to global supply chains and economic recovery. The resurgence of the pandemic in these regions has highlighted the fragility of the economic recovery, prompting investors to reassess their risk exposure.

The ongoing fourth-quarter earnings season has provided little respite for investors, as results have been largely underwhelming. This tepid performance has intensified the market's downward momentum, with investors losing confidence in the near-term growth prospects of Indian equities. Companies across various sectors have reported mixed results, failing to inspire confidence among market participants.

In today's session, the market capitalisation of BSE-listed companies fell from Rs 441.09 lakh crore on Wednesday to Rs 439.09 lakh crore, resulting in a loss of Rs 2 lakh crore in investor wealth. This decline reflects the broader market correction that has resumed after a brief pause in the previous session. The volatility in the market has been a cause for concern, as investors grapple with the uncertainties surrounding economic and geopolitical developments.

Key stocks such as Reliance Industries Ltd, M&M, Infosys, ITC, HDFC Bank, TCS, L&T, HUL, Axis Bank, and PowerGrid were among the top losers on the Sensex. Meanwhile, Bharti Airtel, IndusInd Bank, and UltraTech Cement were the only gainers, highlighting the negative sentiment prevailing in the market. The performance of these stocks underscores the challenges faced by the market, as investors remain cautious amid the prevailing uncertainties.

Market breadth was notably negative, with 2,178 stocks declining, 1,741 advancing, and 167 remaining unchanged on the BSE. This distribution underscores the pervasive bearish sentiment.