Sensex Falls 800 Points, Nifty Below 24,700 in Broad Selloff

Introduction

On May 20, 2025, Indian equity markets experienced a sharp decline, with the BSE Sensex dropping over 800 points and the NSE Nifty falling below the 24,700 mark. This downturn was influenced by a combination of global economic uncertainties, foreign institutional investor (FII) sell-offs, and sector-specific pressures.

Key Indices Performance

• Sensex: Closed at 81,256.55, down by 799.21 points or 0.97%.
• Nifty 50: Ended at 24,699.50, a decline of 245.95 points or 0.99%.
• Nifty Bank: Dropped by 543.65 points to close at 54,877.05.

The market’s decline was broad-based, affecting large-cap, mid-cap, and small-cap stocks alike.

Factors Contributing to the Selloff

1. Global Economic Concerns

Recent downgrades of the U.S. government’s credit rating by Moody’s have led to increased volatility in global markets. This downgrade has heightened investor concerns about global economic stability, prompting a shift towards safer assets and away from equities.

2. Foreign Institutional Investor (FII) Sell-Offs

FIIs have been net sellers in the Indian markets, withdrawing capital amid global uncertainties. This outflow has added pressure on domestic equities, contributing to the overall market decline.

3. Profit Booking

Following a recent rally, investors engaged in profit booking, leading to a sell-off in various sectors. This is a common occurrence when markets reach new highs, as investors look to lock in gains.

4. Sector-Specific Declines

Key sectors such as Information Technology (IT) and Financials witnessed significant declines. The Nifty IT index fell by 1.4%, with major IT companies like Infosys and TCS leading the losses. Similarly, banking stocks faced selling pressure, contributing to the decline in the Nifty Bank index.

Impact on Mid and Small-Cap Stocks

Mid-cap and small-cap stocks were not immune to the sell-off. Indices tracking these segments also registered declines, reflecting the widespread nature of the market downturn.

Notable Stock Movements

• Pfizer Ltd: Experienced a significant surge in trading volumes, with over 12 lakh shares changing hands, marking a 75-fold increase over the two-week average.
• Quess Corp Ltd: Led the losers in the ‘A’ group on the BSE, indicating sector-specific challenges.
• Ganesh Benzoplast Ltd: Was among the top losers in the ‘B’ group, reflecting the broader market weakness.