indian stock market Thursday, February 19, saw heavy selling as investors booked profits across sectors following recent gains.
Sensex fell as much as 1,470 points in intraday trade, while Nifty 50 touched a low of 25,388.75 during the session. Although the indices pared some losses, they ended with deeper losses.
The 30-stock Sensex ended the session 1,236 points or 1.48% lower at 82,498.14, while its 50-stock counterpart, Nifty 50, ended the day at 25,454.35, down 365 points or 1.41%.
Broad-based selling also hit the second-ranked mid- and small-cap indices, as the BSE 150 Midcap index fell 1.54% and the BSE 250 Smallcap index fell 1.16%.
investors suffered losses ₹Total market capitalization of BSE-listed companies fell by almost Rs 7 lakh crore ₹Rs 465 lakh crore in a day ₹Rs 472 lakh crore in the last session.
Why did the stock market fall? 5 key factors
Let's take a look at the five key factors that could be behind the stock market decline on Thursday:
1. Profit booking after recent gains
After the recent gains, some profit-taking is being seen in the domestic market. On Wednesday, Sensex and Nifty 50 rose for the third consecutive session. With key macro triggers including Budget, India-US deal and RBI policy behind us and Q3 results season over, the market is seeing stock-specific action amid lack of fresh domestic triggers.
2. Mixed signals from Fed affected sentiment
minutes The US Fed's January meeting revealed that officials are divided on the way forward. Some of them see scope for further easing if inflation eases, while others are prepared to tighten policy if price pressures persist.
A prolonged pause on rate cuts or a US Fed rate hike could strengthen the US dollar, impacting foreign capital flows into Indian markets, which have resumed in February after seven consecutive months of selloff in the cash segment.
3. Focus remains on US-Iran
A CNN report on Wednesday claimed that the US military is ready to launch strike As soon as this weekend on Iran. Axios The report said a US attack on Iran would likely be a “huge, weeks-long campaign” resembling a full-scale war rather than a limited attack.
The market is closely monitoring the developments in US-Iran relations. Experts say market participants are taking money off the table due to fears of further escalation in US-Iran tensions over the weekend.
4. Rise in crude oil prices
increase in crude oil prices Emotions were also affected. In the previous session, WTI crude futures rose 4.60% to $65.19 a barrel, while Brent crude futures jumped 4.35% to $70.35 a barrel. Crude oil rose on Thursday, with Brent crude rising to $70.53 per barrel and WTI crude rising to $65.4 per barrel.
Rising crude oil prices are negative for the Indian economy and its currency, as the country remains one of the largest importers of crude oil globally.
5. Lack of immediate positive triggers
While experts believe the domestic market is set for a good rally in calendar year 2026 amid projected earnings growth and healthy macroeconomic backdrop, the market is struggling to extend gains due to lack of fresh triggers.
Valuations for large caps have come down to reasonable levels, but remain elevated for mid and small caps, leaving the market in a range bound position.
“Nifty is trading at around 20 times FY2027 estimated earnings, while NSE Midcap and NSE Small-cap indices are trading at 28 and 24 times FY2027 estimated earnings. This makes this market a stock picker's market,” said VK Vijayakumar, chief investment strategist at Geojit Investments.
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of the individual analysts or broking firms and not of Mint. We recommend investors to consult certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.