Stock Market Crash Extends to Sixth Consecutive Session: Sensex, Nifty Plunge Amid Investor Concerns
Indian Markets Witness Sustained Selling Pressure as Global and Domestic Factors Weigh Heavy
The Indian stock markets continued their downward spiral on Wednesday, February 12, 2025, with both the Sensex and Nifty50 extending losses for the sixth consecutive session. The BSE Sensex plunged 905.21 points, hitting a low of 75,388.39, while the NSE Nifty50 breached the 23,000-mark, falling to 22,798.35—a decline of 273.45 points.
The ongoing market downturn has been attributed to a combination of global economic uncertainties, foreign fund outflows, weak corporate earnings, and concerns over monetary policy tightening. Large-cap stocks, including Zomato, IndusInd Bank, Mahindra & Mahindra, Adani Ports, Reliance Industries, Power Grid, ITC, Axis Bank, and Asian Paints, witnessed significant declines, dragging benchmark indices lower.
Key Factors Driving the Market Downtrend
1. Global Economic Uncertainty and Weak Sentiment
Global financial markets have been grappling with recession fears and monetary policy uncertainties, leading to risk-off sentiment among investors. The US Federal Reserve’s cautious stance on interest rate cuts and concerns over inflation persistence have dampened global equities, with a ripple effect on emerging markets like India.
Additionally, geopolitical tensions in the Middle East and supply chain disruptions have further contributed to investor caution, leading to capital outflows from riskier assets, including Indian equities.
2. Foreign Institutional Investors (FIIs) Selling Pressure
Foreign institutional investors (FIIs) have been offloading Indian equities amid global risk aversion. The persistent selling pressure from FIIs has significantly contributed to the ongoing market downturn, exacerbating volatility in large-cap stocks.
- Over the past six sessions, FIIs have reportedly sold equities worth ₹15,800 crore ($1.9 billion), marking one of the most significant outflow streaks in recent months.
- Weakening global risk appetite and an attractive US bond market have driven capital flight away from emerging markets like India.
3. Domestic Corporate Earnings Under Pressure
Several key Indian corporates have reported below-expectation earnings in the ongoing Q3 FY25 results season, leading to a decline in investor confidence.
- Banking and financial stocks, including IndusInd Bank and Axis Bank, saw declines as margin pressures and higher provisions weighed on earnings.
- ITC and Asian Paints suffered losses due to rising input costs and lower-than-expected volume growth in the FMCG and paints sectors.
- Reliance Industries and Adani Ports faced profit-booking, with concerns over global demand slowdown and regulatory uncertainties affecting sentiment.
4. Inflation and RBI Policy Uncertainty
Despite moderating inflation trends, concerns persist over future Reserve Bank of India (RBI) policy actions. The RBI has signaled a wait-and-watch approach on rate cuts, aligning with global central banks’ cautious stance.
- Consumer inflation (CPI), though within the RBI’s target band, remains elevated, reducing the likelihood of imminent rate cuts.
- Investors are wary that higher borrowing costs may persist for longer, impacting corporate growth projections and overall market liquidity.
Sectoral Performance: Broad-Based Selling Across Key Industries
The market downturn was broad-based, with almost all major sectoral indices closing in the red.
| Sector | Performance |
|---|---|
| Banking & Financials | IndusInd Bank, Axis Bank down 2-3%, weighed by FII selling |
| Energy & Infrastructure | Adani Ports, Reliance Industries declined on profit-booking |
| FMCG | ITC, Asian Paints saw weak demand outlook and higher costs |
| Auto | Mahindra & Mahindra declined as global slowdown concerns emerged |
| Technology | IT stocks saw mixed performance, global demand remains a key concern |
Investor Outlook: Will the Market Continue to Slide?
Short-Term Market Direction Remains Uncertain
Market analysts suggest that volatility is likely to persist in the near term, with further declines possible if global uncertainties persist. Key factors to watch in the coming sessions include:
- US inflation data and Federal Reserve commentary A higher-than-expected inflation print could dampen rate cut hopes, impacting global equities.
- RBI’s monetary policy stance Any hints of liquidity-tightening measures could further impact domestic sentiment.
- Corporate earnings season progress Investors will closely monitor upcoming earnings reports from heavyweight companies to gauge the Indian economy’s resilience.
Long-Term Fundamentals Remain Strong
Despite the current correction, market fundamentals remain intact, with India continuing to be a high-growth economy. Structural drivers such as:
- Robust GDP growth projections
- Government infrastructure push and policy support
- Growing domestic consumption trends
…suggest that the current sell-off may present long-term buying opportunities for investors.
