The Indian stock market tanked over 1.5 per cent on Thursday amid broad-based selling. BSE Sensex, the 30-share index, nosedived 1,247.71 points or 1.67 per cent to settle at 73,580.54. Nifty50, the 50-share index of NSE, ended the session at 23,063.10, down 383.70 points or 1.64 per cent.
Why Indian Market Crashed Today: 5 Points
1. Higher US Bond Yield
Indian stock market witnessed a broad-based sell-off, and a higher US bond yield was one of the key triggers behind the decline.
"The initial trigger came from a sharp repricing of global interest-rate expectations. Strong US business-activity data and weak demand at the five-year Treasury auction pushed the US 10-year yield to around 5.11%, its highest level since 2007. The move strengthened expectations of another Federal Reserve rate increase and reduced the relative attractiveness of emerging-market equities," said Hariselvan Radhakrishnan, Founder & CEO of HST Wealth.
2: IRDAI New Guidelines
The shares of the insurance and banking sector remained under pressure after concerns regarding regulatory reviews of commission structures and their implications for profitability.
"The domestic decline was amplified by the IRDAI consultation paper proposing tighter limits on insurance commissions, distribution expenses and loan-linked insurance practices. The potential pressure on bancassurance fees triggered heavy selling across insurers, distribution platforms and exposed banks and NBFCs, pushing Bank Nifty below 56,000 and extending the damage to the broader benchmarks," Radhakrishnan noted.
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3- Bank Stock Crash
BSE Bankex nosedived 1,199.31 points. With all the participant ended the session in red except Canara Bank after the IRDA decision.
AU Bank, IDFC Bank and Axis Bank remained the top losers. Meanwhile, PF Fintech shares tanked 34 per cent or Rs 641.80 in a single session to close at Rs 1,244.50 on NSE.
"Broader-market indices also remained under pressure, with selling seen across sectors, pointing to a broad deterioration in risk appetite rather than weakness concentrated in a handful of segments," said Ponmudi R, CEO of Enrich Money.
4. Crude Price
A surge in crude oil prices added to the pressure. WTI crude surged above $94 a barrel. Brent crude, the global benchmark, moved above $105, sharply reversing their recent declines.
5. Technical Breakout
A technical lower-level breakout also weighed in on broad-based sell-off.
"Market extended the opening weakness into a broad-based sell-off after the Nifty broke through successive support levels at 23,300 and 23,200. The Nifty closed at 23,063.10, the Sensex at 73,580.50 and Bank Nifty at 55,438.50," Hariselvan Radhakrishnan added.
Top Losers
Except for NTPC, all stocks from the 30-share index Sensex ended lower.
Bajaj Finance dropped 5.47 per cent
Axis Bank declined 4.67 per cent
Bajaj Finserv dropped 4.06 per cent
InterGlobe Aviation dropped 2.78 per cent
Trent dropped 2.75 per cent
Mahindra & Mahindra dropped 2.31 per cent
NTPC ended unchanged