Indian stock markets experienced a sharp decline after the government confirmed two cases of Human Metapneumovirus (HMPV) in Karnataka, coinciding with reports of a virus outbreak causing chaos in China. As a result, investors adopted a cautious stance, leading to a significant sell-off. The BSE Sensex dropped over 1,100 points, while the Nifty lost approximately 1.4%.
The India VIX, a measure of market volatility, spiked by 13% as widespread selling pressure was seen across mid and small-cap stocks, as well as various sectors. The 30-share BSE benchmark plunged 1,263.16 points, or 1.59%, hitting an intraday low of 77,959.95. The broader NSE Nifty also dropped 403.25 points, or 1.67%, to reach an intraday low of 23,601.50.
All sectors faced selling pressure, with the Nifty Metal index falling 2.66%, the Nifty PSU Bank index dropping 3.35%, and the Nifty Auto index slipping 1.68%, reflecting the widespread weakness in the market.
Vinod Nair, Head of Research at Geojit Financial Services, linked the sharp sell-off to a “sell-on-rally sentiment” spurred by a strong U.S. dollar and high stock valuations. He suggested that the markets would likely remain directionless until third-quarter earnings provide fresh guidance.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, pointed to external macroeconomic concerns as another factor. “With the dollar index at 109 and the 10-year U.S. bond yield at 4.62%, the global environment remains unfavourable. FIIs are likely to continue selling until these factors stabilize,” he noted.
Factors That Triggered Today’s Market Crash
While investors were already focused on tracking corporate earnings and the upcoming Q3 results season, as well as ongoing geopolitical developments, the news of HMPV cases in India came as an unexpected trigger for the market downturn.
The Union Health Ministry confirmed the detection of two HMPV cases in Karnataka, identified through routine surveillance for respiratory viral pathogens. Both cases involved infants—one a 3-month-old female who was discharged after recovering, and the other an 8-month-old male who is currently recovering.
The Ministry assured that there is no cause for alarm, as both cases were detected as part of ongoing monitoring efforts. It emphasized that the situation in China, linked to the flu season, is not unusual, and the surge is attributed to common pathogens like the Influenza virus, RSV, and HMPV.
As a precaution, the Ministry plans to expand HMPV testing and has tasked the Indian Council of Medical Research (ICMR) with year-round monitoring of HMPV trends in India.
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