Stock market meltdown today: Nifty50 falls below 21,300 as bears strike, while the BSE Sensex drops 1000 points. D-Street: primary causes of falls

Today’s stock market crash: Tuesday’s losses in the BSE Sensex, which gave up the 71,000 barrier, and the Nifty, which plummeted 1% and closed below the 21,300 level, dealt a severe blow to the main Indian stock indexes. The BSE Sensex was down more than 1,000 points, or 1.44%, at 70,392.33 at 2:27 PM. The Nifty50 was down more than 300 points, or 1.53%, at 21,242.05.

Even more of a sell-off occurred in the larger market, as mid- and small-cap indexes fell by 1.5–2%. According to an ET article, as a consequence, investors on Dalal Street had losses of almost Rs 5 lakh crore, and the market capitalization of all BSE-listed equities dropped to Rs 369.5 lakh crore.
While IT and pharma saw some purchasing activity, sectors including banks, FMCG, oil and gas, and metals saw a decline despite the good trend in global markets.
Why the Nifty50 and BSE Sensex are collapsing
Reliance Industries (RIL) and HDFC Bank jointly accounted for almost half of the Nifty’s losses, which is essentially the cause of the decrease. RIL’s shares plummeted by 2%, while HDFC Bank’s dipped by 3%. Citing a more balanced risk/reward ratio, global brokerage giant Citi lowered RIL’s shares to a neutral rating.
Apart from HDFC Bank and RIL, there were also decreases in other banking companies including IDFC First Bank, IndusInd Bank, PNB, AU Small Finance Bank, and SBI. Selling pressure was also applied to oil and gas equities such as IOC, HPCL, Adani Total Gas, Oil India, ONGC, and BPCL.
This month, foreign institutional investors (FIIs) have sold shares worth over Rs 13,000 crore, resulting in a net selling position in Indian equities. Conversely, domestic institutions have been attempting to absorb the sell-off, spearheaded by mutual funds.
As individual investors continue to buy stocks without taking values into account, analysts have issued cautions about overbought equities in a number of different industries. In the last three months, the Nifty has increased by more than 9%, while the mid- and small-cap indexes have increased by almost 18%.
Technically, there is pressure on the Nifty to sell, and this pressure may continue in the next sessions. To sustain good momentum, the 21,500–21,450 support area is essential.
Investors must proceed with extreme care, particularly in light of the unrest in West Asia and the Red Sea. Due to high valuations, Dr. V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stressed the need of exercising prudence even in prosperous times.