Sensex Nosedives 1200 Points, Nifty Below 23700: Is HMPV Dragging Markets Down?

The benchmark BSE Sensex tanked 1,263.16 points to 77,959.95 during the afternoon trade, while the NSE Nifty slumped 403.25 points to 23,601.50.

A broad sell-off across sectors and indices pushed markets lower. The Nifty Bank index fell 1.81% to 50,066, while the India VIX fear gauge surged 14% around 2 PM. What is leading this fall?

HMPV Cases in India Trigger Panic
Investors were spooked after the government confirmed two cases of Human Metapneumovirus (HMPV) in Karnataka. The news came amidst growing concerns over a virus outbreak in China, triggering fears of potential disruptions.

FII Selling Pressures Markets
Foreign Institutional Investors (FIIs) pulled out Rs  4,285 crore from Indian equities in the first three trading days of January, dampening market sentiment. The sell-off was driven by apprehensions surrounding Q3 earnings and high valuations of Indian stocks.

High Dollar Index Adds to the Pressure
The rupee's depreciation against the Dollar added to market woes, as currency risks deterred foreign investments. The US Federal Reserve’s hawkish stance, indicating fewer rate cuts in 2025, further weakened investor confidence.

Sectoral and Stock-Specific Losses
All Nifty sectoral indices closed in the red, with PSU Bank (-3.52%), Metal (-2.95%), and Realty (-2.62%) being the worst-hit sectors. Among stocks, Tata Steel fell the most, losing 4.48%, followed by Kotak Mahindra Bank (-3.13%) and Power Grid (-3.05%).

Morning Gains Turn Sour
The markets opened in the green, with Sensex up by 272.45 points and Nifty rising by 27.60 points at 9:30 AM. However, the optimism faded quickly as selling intensified. ITC Ltd, which turned ex-date for its hotel business demerger, contributed significantly to the fall.