Chaos in the Stock Market: Sensex Falls 1,200 Points, Investors Lose ₹6.42 Lakh Crore

National News: The Indian stock market witnessed a sharp sell-off on Friday, marking the second consecutive session of heavy losses. A combination of global pressure, sustained selling by foreign investors, and weakness in financial stocks significantly impacted investor sentiment. The Sensex plunged 721 points to close at 81,463, while the Nifty dropped 225 points to settle at 24,837.

Within just two days, investors have seen over ₹6.42 lakh crore wiped out from market capitalization, raising serious concerns throughout the investor community.

Market Performance Over Two Days

• Index Total Fall (in Points) Current Level
• Sensex 1,263.55 ↓ 81,463
• Nifty 382.90 ↓ 24,837

On Friday alone, the Sensex tumbled by up to 786 points during intraday trade, while the Nifty slipped as much as 256 points at its lowest mark.

Top 5 Reasons Behind the Market Crash

1. 💸 Heavy Selling in Bajaj Finance

Despite strong Q1 earnings, concerns over the asset quality of the MSME portfolio led to sharp selling in Bajaj Finance and Bajaj Finserv.

• Bajaj Finance dropped 4.7%,
• Bajaj Finserv fell 2.3%,

dragging down the broader indices.

Other major financial institutions, including SBI, Kotak Mahindra Bank, Axis Bank, and HDFC Bank, also witnessed declines of up to 1.2%.

2. Uncertainty Over India–US Trade Agreement

• Talks between India and the United States regarding an interim trade deal remain stalled.
• No breakthrough has been achieved on tariff issues related to agricultural and dairy products.
• The absence of a formal tariff proposal from the US side has only added to market uncertainty.

3. 💰 Consistent Selling by FIIs

• Foreign Institutional Investors (FIIs) have been net sellers in the Indian market for the past four sessions.
• In total, FIIs have withdrawn ₹11,572 crore in just four trading days, adding substantial pressure on the indices.

4. Limited Impact of India–UK Free Trade Agreement

Although India and the UK recently signed a long-awaited Free Trade Agreement (FTA), the market has shown little response.

Analysts believe the FTA’s benefits will remain limited until clarity emerges on the India–US trade deal.

5. Weak Global Cues

Asian markets closed in the red on Friday, driven by profit-booking ahead of key economic data and policy events in the US.

• Japan’s Nikkei fell 0.8%
• Hong Kong’s Hang Seng dropped 1.1%
• Australia’s ASX 200 declined 0.5%

Investors globally are being cautious ahead of the US Fed’s policy meeting, non-farm payroll data, and earnings reports from tech giants like Apple, Amazon, Meta, and Microsoft.

What Lies Ahead for Investors?

Market experts suggest that the Indian equity market is likely to remain under pressure in the short term.
The combination of:

• FII outflows,
• Global economic uncertainty, and
• Ambiguity around key trade negotiations
• ...could keep indices volatile in the near future.

Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, “Valuations in small-cap and mid-cap segments are stretched. A correction seems inevitable.”