Why is stock market crashing? Sensex, Nifty head for worst losing streak in 25 years

The Indian stock market is facing its longest losing streak in nearly 25 years, with the BSE Sensex and NSE Nifty50 falling more than 1% on Thursday. The foreign investor outflows, rising US bond yields and pressure on the rupee have been the key factors behind the brutal selloff, which led to a plunge of over 1,000 points in the BSE Sensex and a drop of over 300 points in the NSE Nifty50.

The total market capitalisation of companies listed on the BSE has dropped to Rs 466 lakh crore. Foreign Institutional Investors (FIIs) sold Indian equities worth $1.06 billion on Wednesday, marking a record $27.8 billion in year-to-date selling. While FIIs continue to sell shares, they have been investing in the primary market and buying mid and small-cap stocks.

US bond yields have hit multi-year highs, contributing to the pressure on equities, as higher yields make debt markets more attractive to investors. The rupee has also been under pressure, falling against the dollar amid higher US Treasury yields. The selloff has been broad-based, affecting heavyweights like Maruti, Mahindra & Mahindra, Tata Steel, Adani Ports, ITC, UltraTech Cement, Power Grid, and several others.

However, some stocks like Infosys, HDFC Bank, Kotak Mahindra Bank, and HCL Tech managed to show gains during the session.