Indian Stock Markets Plunge: Sensex and Nifty Crash Over 2% in Volatile Week
Dalal Street experienced a turbulent week as Indian equity benchmarks, the BSE Sensex and NSE Nifty50, witnessed a significant correction, declining over 2% and eroding investor wealth by more than ₹16 lakh crore. The markets displayed sharp volatility, failing to sustain any recovery despite brief rebounds, ending the week on a weak note.
Weekly Performance and Market Capitalisation Erosion
On a weekly basis, the Sensex plummeted by 2,032.65 points, or 2.43 per cent, while the Nifty shed 645.7 points, or 2.51 per cent. The market capitalisation of BSE-listed companies dropped sharply, with a single-day fall of ₹6,95,963.98 crore on Friday, bringing the total to ₹4,51,56,045.07 crore, or approximately $4.93 trillion. Over the entire week, the total market value eroded by a staggering ₹16,28,561.85 crore, highlighting the severe impact on investor portfolios.
Friday's Slide and Rupee Depreciation
Equity benchmarks extended their losses on Friday, closing around 1% lower as broad-based selling pressure intensified. This decline coincided with the Indian rupee sinking to an all-time low against the US dollar, depreciating to 92 per dollar intra-day before recovering marginally to close at 91.88. The BSE Sensex dropped 769.67 points, or 0.94 per cent, to finish at 81,537.70, while the NSE Nifty fell 241.25 points, or 0.95 per cent, settling at 25,048.65. Market breadth remained weak, with 2,989 stocks ending in the red, 1,229 advancing, and 143 closing unchanged.
Key Factors Behind the Market Crash
Several factors contributed to the market downturn. Muted quarterly performances from index heavyweights like ICICI Bank and HCL Technologies dampened sentiment, raising concerns about a delayed earnings turnaround. Rising crude oil prices and the rupee's sharp slide, despite intervention by the Reserve Bank of India, intensified macroeconomic worries related to inflationary pressures and the trade deficit.
Gaurav Garg of the Lemonn Markets Desk noted that these elements, combined with geopolitical uncertainties from US President Donald Trump's tariff threats on the EU, frayed global market nerves. Additionally, the absence of major players in artificial intelligence has kept India on the sidelines of the AI-driven rally that boosted global equity markets in 2025, unlike gains seen in the US, China, Taiwan, and South Korea.
Expert Insights and Analysis
Mehul Kothari, DVP - Technical Research at Anand Rathi Shares and Stock Brokers, attributed the decline to persistent foreign institutional investor (FII) outflows, weak Q3 earnings trends in sectors like IT and consumption, continued rupee weakness, and lingering global trade uncertainties. These factors collectively outweighed intermittent positive global cues, keeping sentiment risk-averse.
Thomas V Abraham, Research Analyst at Mirae Asset ShareKhan, highlighted that selling pressure was fueled by ongoing FII outflows and profit-taking ahead of an extended weekend. He pointed to geopolitical risks from stalled US trade talks and intensifying US-Europe frictions, with overseas funds' persistent selling magnifying the broader downturn. Notably, Adani group stocks, representing roughly 2.93% of the Nifty 50's weight, saw substantial declines of 8-13%, amplifying the index's retreat. According to a Reuters report, Adani group stocks shed $12.5 billion in market capitalisation after the US SEC sought court approval to issue summons.
Vinod Nair, Head of Research at Geojit Investments Limited, suggested that the market direction in the coming week will likely be driven by global macroeconomic signals and domestic fiscal expectations. Investors will closely track guidance from the Federal Reserve on interest rate cuts and anticipate measures in the Union Budget aimed at easing external trade pressures and supporting capital flows. With the Q3 earnings season ongoing, stock-specific movements are expected to remain prominent, while overall sentiment stays cautious, shaped by global developments, currency trends, and earnings outcomes.
Disclaimer: Recommendations and views on the stock market, other asset classes, or personal finance management tips given by experts are their own and do not represent the views of The Times of India.
