Sensex crashes over 1,000 points: 5 reasons behind the Rs 5 lakh crore selloff

economictimes.indiatimes.com:

Sensex fell over 1,000 points to give up the 71,000 level, while the Nifty also cracked over 1% to trade below the 21,400 mark. The sell-off was deeper in the broader market with mid and smallcap indices slipping 1.5-2%. In the process, Dalal Street investors lost about Rs 5 lakh crore as the market capitalisation of all BSE-listed stocks fell to Rs 369.5 lakh crore.

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Defying positive momentum seen in global markets, banks, oil and gas stocks, FMCG and metals led the downside, while buying was seen in pharma and IT.

RIL and HDFC Bank alone contributed to more than half of the loss in Nifty.

Also read: India crowned stock market superpower but 2 Wall Street darlings bigger than entire Dalal Street
«Tensions in West Asia and the Red Sea are areas of serious concern. If something goes wrong, the market will be impacted since valuations are high. Therefore, even when optimistic, investors should be cautious,» said Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Here are 5 factors behind today's fall in Sensex, Nifty:

1) HDFC Bank

The heavyweight counter was alone responsible for about 1/3rd of today's loss as HDFC Bank shares dropped another 3% as investors were not willing to buy the dip that began in the aftermath of the disappointment that came from the December quarter results.

Not just HDFC Bank, but Nifty Bank too fell 2%, with IDFC First Bank shares falling 6.5% followed by IndusInd Bank, PNB, AU Small Finance Bank, and SBI.

2) RIL

Shares of India's most valued company Reliance Industries (RIL) fell 2% and was the second biggest contributor in today's fall. Global brokerage Citi has downgraded the stock to neutral