Markets retreat sharply on May 22 following global sell-off, rising US yields, and macroeconomic concerns.
Mumbai, May 22, 2025 – The Indian stock market witnessed a sharp sell-off in early trade on Thursday, reversing the previous day’s modest gains. The BSE Sensex plunged over 800 points, while the NSE Nifty 50 slipped below the key 24,550 level, reflecting heightened investor anxiety amid global and domestic headwinds.
At 9:50 AM IST, the Sensex was down over 820 points, while the Nifty 50 traded below 24,530, shedding nearly 1.3% in intraday losses.
Key Reasons Behind the Market Fall
🔻 1. Global Market Sell-Off:
US markets closed with their biggest losses in over a month on Wednesday. The Dow Jones Industrial Average fell 1.91%, the S&P 500 dropped 1.61%, and the Nasdaq Composite declined by 1.41%. This negative sentiment spilled over to Asian markets, with the Nikkei, Kospi, and Hang Seng all trading lower.
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🔻 2. Spike in US Treasury Yields:
US bond yields surged after a weak Treasury auction. The 10-year yield rose to 4.58%, while 20-year and 30-year yields climbed to multi-month highs. Higher yields typically hurt equity valuations and increase risk aversion.
🔻 3. Weak Gift Nifty Indication:
Gift Nifty traded nearly 48 points below the previous Nifty futures close, indicating a negative opening and poor sentiment among traders.
🔻 4. US Fiscal Concerns:
Fears over President Trump’s proposed $3.8 trillion tax and spending bill potentially worsening the US debt crisis weighed on global markets. Investors moved to safe-haven assets like gold and bonds, triggering a sell-off in equities.
🔻 5. Geopolitical Tensions:
Renewed concerns about Iran-Israel tensions and missile threats, along with rising instability in the Middle East, have added to investor caution.
🔻 6. Rising COVID-19 Cases in Asia:
Reports of increasing COVID-19 infections in countries like Malaysia and the Philippines have revived fears of supply chain disruptions, especially in manufacturing-heavy regions.
Sectoral & Stock Impact
- Banking, IT, and Auto stocks led the decline.
- Heavyweights like Reliance Industries, HDFC Bank, Infosys, and ICICI Bank were among the top losers.
- Volatility Index (India VIX) jumped over 6%, indicating heightened fear in the market.
What Should Investors Do?
Analysts advise caution in the near term, suggesting that investors:
- Avoid aggressive buying during volatile sessions.
- Focus on defensive sectors like FMCG and Pharma.
- Track updates on the India-US trade deal and global interest rate outlook.
Tags:
Sensex, Nifty 50, Indian stock market crash, May 22 market fall, global sell-off, US bond yields, geopolitical tensions, Gift Nifty, investor sentiment