Market Crash: These are the 3 biggest reasons why the Sensex fell 450 points from its high today.

News Topical, Digital Desk : Market Crash: Indian equity benchmarks Sensex and Nifty fell sharply from their intraday highs amid volatility on December 17, heading for their third consecutive day of decline. At 12:15 pm, the Sensex was down 224.47 points, or 0.27%, at 84,455.39, and the Nifty was down 63 points, or 0.24%, at 25,797.10.

Approximately 1,346 stocks advanced, 2,222 declined, and 183 remained unchanged. The Sensex fell 450 points from its intraday high. The Sensex's intraday high was 84,889, while the Nifty's was 25,929.

Key reasons for the market decline: 

1. Uncertainty regarding the Fed's stance: Mixed signals from US jobs data have created uncertainty regarding the Federal Reserve's interest rate move. Wall Street closed mixed, and Asian markets also saw sluggishness. In US markets, the S&P 500 fell 0.24%, closing lower for the third consecutive session. The Nasdaq Composite gained 0.23%, while the Dow Jones Industrial Average slipped 0.62%. While US job growth in November was higher than expected, the unemployment rate rose to 4.6%, a four-year high. Investors are now eyeing the US Consumer Price Index (CPI) data, which will be released on Thursday. 

2. Continued FII Selling On the institutional front, on December 16 (Tuesday), foreign institutional investors (FIIs) net sold shares worth ₹2,060.76 crore. Meanwhile, domestic institutional investors (DIIs) bought shares worth ₹770.76 crore. As of Tuesday, foreign investors have sold Indian shares for eight consecutive sessions. According to Ponmudi R, CEO of Enrich Money, "Continuous FPI selling and a weak rupee pose significant pressures for the market in the near term, which is being exacerbated by the delay in the India-US trade deal." Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, says that due to the weakness in AI trade, FIIs could potentially become buyers in India again in 2026. If an India-US trade deal is reached, the rupee could also strengthen. In such a situation, despite the current fall, investors should make a strategy keeping in mind the possible rally in 2026. 

3. Selling in banking giants Banking stocks witnessed a mixed trend. A 1.5% rise in the shares of State Bank of India (SBI) provided some support to Nifty, but index heavyweights ICICI Bank and HDFC Bank closed with a fall of 1.5% and 0.6% respectively, which increased the pressure on the market. At the same time, after a sharp fall in the previous sessions, Axis Bank shares rose by more than 1%. Bank Nifty was trading with a fall of about 0.2%.

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