Sensex Falls 600 Points, Nifty Slips Below 25,900: Key Reasons Behind the Market Drop

Indian stock markets ended lower on Thursday as both Sensex and Nifty witnessed selling pressure. Despite foreign investors turning net buyers and a US Fed rate cut, profit-taking at record highs and expiry-related volatility dragged the indices down.

By 2:10 PM, the Sensex had slipped 579 points (0.7%) to 84,423, while Nifty fell 175 points to 25,884. Major losers included Bharti Airtel, Bajaj Finance, Power Grid, Infosys, and Reliance Industries.

1. US Fed Rate Cut Sparks Uncertainty

The US Federal Reserve cut interest rates by 25 basis points to 3.75%. However, Fed Chair Jerome Powell hinted that further cuts in December were uncertain, keeping investors cautious.

2. Profit Booking Near Record Highs

Markets saw heavy profit-taking as benchmark indices traded close to their all-time highs. Both Sensex and Nifty had already risen over 5% in October and were less than 2% away from their previous peaks. Investors chose to book profits, leading to a temporary pullback.

3. Weak Global and Asian Cues

Despite the US cutting tariffs on Chinese goods, trading sentiment in Asia remained subdued. The Shanghai Composite dropped 0.7%, while Hang Seng and Straits Times were down 0.3%. Only Nikkei and Kospi posted small gains, showing mixed market reactions globally.

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4. Sensex F&O Expiry Pressure

Thursday marked the monthly expiry of Sensex futures and options (F&O) contracts, leading to added volatility. The Put-Call Ratio (PCR) stood at 0.7, suggesting more call positions than puts. High open interest was seen around the 85,000 strike price, intensifying selling pressure in the market.

Conclusion

Thursday’s market decline was largely driven by profit booking, expiry-related volatility, and weak global cues despite supportive developments like FII inflows and the US rate cut. 

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