Stock market crashes as Sensex plunges 823 points and Nifty drops below 24,900. Discover 5 key reasons behind the fall on 12 May 2025.
📉 Sensex Tanks 823 Points: Why the Stock Market Is Down Today?
Mumbai, 12 May 2025 — The Indian stock market witnessed a sharp decline on Monday, with the BSE Sensex falling 823 points to close at 80,115, and the NSE Nifty slipping below the 24,900 mark for the first time in three weeks. Investor sentiment turned sour amid a combination of global cues, weak corporate earnings, and rising inflation fears.
But what exactly triggered today’s crash? Let’s break down the top 5 key reasons behind the dramatic fall in the stock markets.
🔍 1. US Fed Rate Hike Fears Trigger Global Sell-off
Global equity markets, including India, were rattled after comments from U.S. Federal Reserve officials indicated that interest rates may remain higher for longer. This stoked fears of tightening liquidity, leading to a global risk-off sentiment.
- The Dow Jones Futures were down by over 250 points early Monday.
- Asian markets such as Nikkei and Hang Seng also registered losses of 1-1.5%.
- FIIs (Foreign Institutional Investors) net sold ₹2,134 crore in Indian equities today.
📊 Expert Take:
“High inflation coupled with sticky wage growth in the U.S. has delayed hopes of a rate cut. This is pressuring emerging markets like India,” said Amit Jain, Head of Research at Yes Securities.
📊 2. Weak Q4 Earnings Drag Major Indices
Indian companies, especially in the IT and banking sectors, posted weaker-than-expected fourth-quarter (Q4 FY25) earnings, which dented investor confidence.
- Infosys dropped 3.8% after missing revenue guidance.
- HDFC Bank slipped 2.5% due to lower net interest margins.
- Reliance Industries declined 1.9% as refining margins contracted.
This earnings disappointment led to heavy profit booking, especially in heavyweight stocks, pulling the indices down.
🔗 Related Post: Latest Quarterly Results of Top Nifty Companies
💸 3. Rising Inflation Worries and Crude Oil Spike
The Consumer Price Index (CPI) inflation for April 2025 rose to 5.12%, exceeding market expectations of 4.8%. This was driven largely by:
- Higher food prices, especially vegetables and pulses.
- A sharp uptick in global crude oil prices, with Brent crossing $88 per barrel.
💬 Market Insight:
“Sticky inflation can delay rate cuts and reduce consumer spending power, affecting overall market sentiment,” noted Renu Agarwal, economist at Kotak Institutional Equities.
🌍 4. Geopolitical Tensions in the Middle East Intensify
Fresh tensions between Israel and Iran escalated over the weekend, raising concerns about energy supply disruptions. Oil prices spiked, and safe-haven assets like gold and U.S. bonds saw inflows.
- Gold prices in India jumped to ₹68,400 per 10 grams.
- USD/INR also rose to 83.47, indicating rupee weakness.
Markets typically react negatively to geopolitical uncertainty, and this time was no different.
📉 5. Technical Correction After Record Highs
The Sensex and Nifty recently touched record highs last week. As markets often correct after such sharp rallies, technical indicators pointed towards overbought conditions, triggering a short-term correction.
- The Relative Strength Index (RSI) of many stocks was above 70.
- Volatility Index (VIX) surged by 8% today, signaling panic selling.
📌 Reminder:
Corrections are a healthy part of market cycles and allow for better entry points.
📌 Sector-Wise Impact: Who Lost the Most?
SectorDecline (%)Major Losers
IT -2.9% Infosys, TCS, Tech Mahindra
Banks -2.3% HDFC Bank, Kotak, Axis Bank
Auto -1.7% Tata Motors, Bajaj Auto
Energy -1.5% Reliance, ONGC
Pharma +0.8% Sun Pharma, Dr. Reddy’s
📈 What Should Investors Do Now?
Experts suggest avoiding panic and using the dip to accumulate quality stocks with strong fundamentals.
Investment Tips:
- Stick to SIPs (Systematic Investment Plans)
- Avoid leveraging or margin trading
- Track upcoming economic data like WPI and RBI statements
❓ FAQs: Why Stock Market Is Falling Today (12 May 2025)
Q1. Why did the Sensex fall over 800 points today(stock market)?
The fall was due to weak Q4 earnings, inflation concerns, global sell-off, and geopolitical tensions.
Q2. Is this the right time to invest in the stock market?
Experts advise cautious investing and suggest accumulating quality stocks in phases.
Q3. What sectors were worst hit in today’s crash(stock market)?
IT, banking, and energy sectors saw the steepest losses due to earnings pressure and rising oil prices.
Q4. Will the market recover soon?
Recovery depends on upcoming inflation data, global cues, and investor sentiment. Volatility may persist in the short term.
Q5. How can investors protect their portfolios in such times?
Diversification, asset allocation, and SIPs in mutual funds are key to long-term stability.
📢 Call to Action:
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