Stock Market Crash: Nifty Falls Below 24,800, Sensex Down Over 900 Points — Key Drivers Behind Decline

The benchmark indices fell over 1% after posting gains for two consecutive sessions, with Sensex falling nearly 900 points in intraday trade on Tuesday. Nifty 50 fell 1.05% to below 24,800 level. The broader segment of the market was mixed as the BSE Midcap was down 0.16% and Smallcap indices were up 0.10%.

"Investors will be focused on the minutes of the US FOMC meeting announcement and Fed Chairman's comment on it, and the domestic Q4 GDP numbers to be announced on Friday. The monthly F&O expiry on Thursday will also determine if investors are betting on bullish bets or it is skewed towards caution for next month,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

The markets were dragged by Nifty IT and Nifty Auto. "A hidden bullish divergence in the RSI has initiated a reversal in the auto sector, and today's session will determine the strength and validity of this signal," said Aditya Gaggar, director of Progressive Shares.

Volatility index VIX rose over 4% on Tuesday.

Asian markets traded mostly lower on Tuesday as investors assess a slew of economic data from the region, while US Treasury bonds held onto gains from Thursday amid easing concerns over US fiscal issues that had unsettled markets earlier in the week. The S&P 500 and Dow Jones closed in red on Friday with both falling over 0.60%, and the Nasdaq was down 1%.

South Korea’s Kospi fell 0.49%, Australia’s ASX 200 advanced 0.45%, and Taiwan’s Taiex was down 0.85%. China’s Shanghai Composite was also down 0.23%.

The Indian rupee opened 5 paise weaker at 85.14 against the US dollar on Tuesday, from its previous close of 85.09 on Monday. This slight depreciation comes amid various global and domestic economic factors influencing the currency markets.

The Euro was at 1,1402 while the dollar index fell to 98.85 as investor concerns over a sweeping tax and spending bill and its implications for the US debt profile continued to undermine sentiments towards US assets. The GBP also rose to 1.3577, while the yen rose to 142.39.

Additionally, Brent oil prices fell to $63.98 in early Asia trade as market participants weighed the possibility of an OPEC+ decision to further increase its crude oil output at a meeting later this week.

Eight members are expected to meet on May 31 one day earlier than previously scheduled, by which it is speculated that the July Production will be increased by as much as 411k barrels per day, said Anil Kumar Bhansali, head of treasury and executive director at Finrex Treasury Advisors LLP.