• The Indian stock market saw a significant downturn due to concerns over the human metapneumovirus (HMPV) and global uncertainties.
• The Sensex and Nifty indices fell by 1.59% and 1.62% respectively, with the PSU bank sector experiencing a decline of over 4%.
• Market experts attribute the sell-off to HMPV concerns and uncertainties surrounding US economic policies and a strong dollar.
• Despite the downturn, some experts maintain a positive outlook, anticipating a potential 5-6% upside for the Nifty Index if key levels are reclaimed and sentiment improves.

The Indian stock market experienced a significant downturn on Monday, with domestic benchmark indices plummeting over 1.5 per cent. This sharp decline was primarily driven by escalating concerns over the human metapneumovirus (HMPV) and increasing global uncertainties. The Public Sector Undertaking (PSU) bank sector on Nifty bore the brunt of the heavy selling, with a decline of more than 4 per cent. Other sectors, including realty, metal, energy, Public Sector Enterprises (PSE), and commodities, also experienced a significant drop, with each falling by over 3 per cent.

The Sensex, a benchmark index of the Bombay Stock Exchange (BSE), closed at 77,964.99, a decrease of 1,258.12 points or 1.59 per cent. The Nifty, another major Indian stock index, settled at 23,616.05, down 388.70 points or 1.62 per cent. The intraday lows for Sensex and Nifty were 77,781.62 and 23,551.90, respectively.

Market Indices and Sectoral Performance

The Nifty Bank index ended at 49,922, down by 1,066.80 points or 2.09 per cent. The Nifty Midcap 100 index closed at 56,366.9, declining 1,564.10 points or 2.70 per cent, while the Nifty Smallcap 100 index closed at 18,425.25, declining 608.45 points or 3.20 per cent. On the BSE, 657 shares ended in green, while a staggering 3,472 shares ended in red. There was no change in 115 shares. On the sectoral front, all sectors ended in red, indicating a broad-based sell-off.

In the Sensex pack, several prominent companies were the top losers. These included Tata Steel, NTPC, Kotak Mahindra Bank, PowerGrid, Zomato, IndusInd Bank, Asian Paints, Reliance, M&M, UltraTech Cement, HDFC Bank, Nestle India, and the State Bank of India (SBI). On the other hand, Titan, HCL Tech, and Sun Pharma emerged as the top gainers.

Market Outlook Amid Global Uncertainties

Market experts have identified the primary catalyst for this sharp sell-off in the domestic market as concerns over the HMPV. This virus, coupled with uncertainties surrounding new US economic policies, the Federal Reserve's hawkish stance on future rate cuts, potential upward revision for CY25 inflation, and a strong dollar, have all negatively impacted market sentiment.

Karthick Jonagadla, Founder and CEO of Quantace Research, noted that Nifty has closed below its critical 200-day exponential moving average (200 DEMA) of 23,650. Despite the market downturn, Jonagadla maintains a constructively positive outlook. He anticipates an upside of 5-6 per cent for the Nifty Index in the near term if key levels are reclaimed and sentiment improves.

Historically, similar market downturns have been observed in response to global health crises and uncertainties. For instance, the global financial markets, including India, experienced significant volatility during the initial outbreak of the COVID-19 pandemic in early 2020. The fear and uncertainty surrounding the virus, coupled with the global lockdown measures, led to a sharp sell-off in the markets.