Sensex Crashes 1,250 Points, Nifty Falls to 25,448; ₹6 Lakh Crore Wiped Out – 5 Key Reasons Behind Market Selloff
The Indian stock market witnessed a sharp intraday correction on Thursday, February 19, with benchmark indices tumbling amid profit booking and weak global cues. The Sensex crashed over 1,250 points, while the Nifty 50 slipped to an intraday low of 25,448.60, triggering widespread selling across sectors.
The broader market was not spared. The BSE mid-cap and small-cap indices declined by more than 0.5% each, reflecting a broad-based selloff across segments.
Investor wealth took a significant hit as the total market capitalisation of BSE-listed companies fell to around ₹466 lakh crore from ₹472 lakh crore in the previous session — eroding nearly ₹6 lakh crore in a single day.
So, why is the stock market falling today? Here are the five key factors driving the downturn.
1. Profit Booking After Recent Rally
After three consecutive sessions of gains, investors chose to book profits. With major macro triggers such as the Union Budget, RBI policy decision, and Q3 earnings season already factored in, the market lacked fresh domestic catalysts.
In the absence of new triggers, traders shifted to stock-specific action, leading to volatility in benchmark indices.
2. US Federal Reserve’s Mixed Signals
Minutes from the US Federal Reserve’s January meeting revealed divided opinions among policymakers. While some officials hinted at possible rate cuts if inflation cools, others signaled readiness to tighten policy if price pressures persist.
A prolonged pause or potential rate hike could strengthen the US dollar, impacting foreign institutional investor (FII) flows into emerging markets like India. Notably, FIIs had resumed buying in February after months of sustained selling.
3. Rising US-Iran Geopolitical Tensions
Market sentiment was further dented by reports of escalating US-Iran tensions. According to international media reports, the US military may consider action against Iran, raising fears of a broader conflict.
Geopolitical uncertainty often prompts investors to reduce risk exposure, especially ahead of weekends, contributing to the sharp selloff.
4. Surge in Crude Oil Prices
Crude oil prices jumped sharply, adding pressure on Indian equities.
Brent crude rose above $70 per barrel
WTI crude climbed above $65 per barrel
Higher crude prices are negative for India, which is heavily dependent on oil imports. Elevated oil costs can widen the trade deficit, increase inflationary pressures, and weaken the rupee — all of which weigh on market sentiment.
5. Lack of Immediate Positive Triggers
Despite expectations of healthy earnings growth in FY26 and FY27, the market is struggling to find fresh momentum. Valuations for large-cap stocks have moderated to reasonable levels, but mid- and small-cap stocks remain relatively expensive.
According to market experts, the Nifty is currently trading at around 20 times FY27 estimated earnings, while mid-cap and small-cap indices are trading at higher multiples. This suggests the market is shifting toward a “stock picker’s market” rather than a broad-based rally.
What’s Next for the Indian Stock Market?
While the short-term outlook appears volatile due to global uncertainties and valuation concerns, analysts remain cautiously optimistic about India’s long-term growth story. Investors are advised to focus on fundamentally strong companies and avoid panic-driven decisions.
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