Sensex nosedives 1,823 points this week – reasons explained

The Indian stock market faced a significant downturn this week, with benchmark indices BSE Sensex and Nifty 50 experiencing a crash on October 25. The BSE Sensex fell as much as 927 points, reaching an intraday low of 79,138, while the Nifty 50 dropped 325.5 points to settle at 24,074.

This decline marks the fourth consecutive week of losses for the benchmarks, the longest streak since August 2023. Over the week, the BSE Sensex has plunged 1,822.7 points, or 2.2%, dropping below the 80,000 mark from its previous close of 81,224.75 on October 18. Similarly, the Nifty 50 has decreased by 673.25 points, or 2.7%, from its prior close of 24,854.05.

Market analysts point to persistent selling by foreign institutional and portfolio investors (FIIs/FPIs) as a primary factor behind the crash. Concerns over elevated valuations of Indian equities and the attractiveness of cheaper investment options in markets like China have driven this sell-off. Gaurang Shah, head investment strategist at Geojit Financial Services, emphasized that this trend has been evident since the beginning of October, compounded by muted quarterly earnings from companies.

As the markets continue to react to these economic pressures, investors remain cautious amid a weakened sentiment.