Nifty and Sensex Crash! These 3 Big Reasons Triggered the Market Meltdown

Investors in the stock market have been inactive for the past four months, but it's time to assess the damage after waking up. On the last trading day of February, the market experienced significant selling. The Nifty 50 opened at 22,433 but dropped over 400 points to an intraday low of 22,120. The Sensex started at 74,201 and fell by more than 1,400 points. Three major factors contributed to this decline.

Selling pressure was widespread, affecting not just the major indices. The BSE Small-Cap index fell over 3.40%, and the BSE Mid-Cap index dropped nearly 3%. Stocks like Patanjali Foods, Granules India, Aditya Birla Real Estate, Deepak Fertilizers, and Redington faced the steepest losses, while KEI Industries, Star Health & Allied Insurance, Polycab India, IEX, RR Cable, and Coal India saw significant buying.

By 1 PM, 81 BSE-listed stocks hit the upper circuit, while 460 were locked in the lower circuit. Additionally, 46 stocks reached their 52-week highs, while 817 hit their 52-week lows.

The GDP data for the December quarter is expected this evening, with investors hopeful for a rebound in the Indian economy. However, concerns about economic growth, earnings, and foreign investor selling have weighed on the market, which has fallen 14% from its record high in September.

Foreign investors have sold Indian stocks worth Rs 1,13,721 crore in 2025, according to NSDL data. In February alone, FIIs sold stocks worth Rs 47,349 crore, while DIIs net bought Rs 52,544 crore.

IT stocks are also under pressure, with Asian markets declining and the MSCI Asia ex-Japan index dropping 1.21%. This downturn follows weak results from Nvidia, leading to a sell-off in AI stocks, including major companies in the "Magnificent Seven." As of this writing, the Nifty IT index has fallen 3.2%, with Persistent Systems, Tech Mahindra, and Mphasis experiencing the largest losses.