Key Reasons Behind the Market Fall
Nifty 50 closed ~0.9–1.1% lower today (exact closing level ~25,420–25,460), marking one of the sharper single-day declines in recent weeks. Sensex shed roughly 400–480 points. Below are the main factors that drove the fall:
1. Renewed FII Selling Pressure (₹2,800–3,200 Cr net outflow today)
- Foreign Institutional Investors (FIIs) turned aggressive sellers again after a brief pause.
- Cumulative January–mid February 2026 FII net outflow now exceeds ₹28,000–30,000 crore.
- High valuations (Nifty PE ~24.2–24.5×) + strong US dollar + rising US 10-year yield (~4.4%) continue to prompt profit booking / risk reduction.
2. Sharp Spike in US 10-Year Treasury Yield
- US 10-year yield jumped ~12–15 bps intraday to ~4.41–4.44%.
- Higher US yields → stronger dollar → capital flows back to US → pressure on emerging markets including India.
- Dollar Index (DXY) also climbed above 107.50.
3. Crude Oil Price Jump (~$3–4 intraday move)
- Brent crude spiked toward $78–79 levels on escalating geopolitical headlines (US–Iran tensions + fresh Red Sea disruptions).
- For India (net oil importer) this means:
- Higher input cost pressure on OMCs, aviation, paints, tyres, chemicals
- Risk of renewed retail inflation fears
4. Banking & Financials Underperformed (Nifty Bank –1.4 to –1.7%)
- HDFC Bank, ICICI Bank, Axis Bank, SBI all closed 1.2–2.1% lower.
- Reasons:
- Margin concerns after RBI kept repo rate unchanged at 5.25% (no further cut signal)
- Rising US yield → higher global borrowing costs → tighter liquidity perception
- Select profit booking after strong Q3 run-up
5. Mid & Small-cap Weakness Continued
- Nifty Midcap 100 and Smallcap 100 fell 1.8–2.4%.
- High-beta names saw deeper cuts as risk-off sentiment intensified.
Quick Summary – What Moved the Market Today
| Factor | Impact on Nifty |
|---|---|
| Heavy FII selling | Very Negative |
| US 10Y yield spike | Negative |
| Crude oil jump | Negative |
| Banking & financials drag | Negative |
| DII buying (offset) | Mild Positive |
Bottom Line Today’s ~1% fall was a classic risk-off move driven by:
- Renewed heavy FII selling
- Rising US yields & stronger dollar
- Geopolitical oil price spike
What to Watch Next
- Whether FII selling intensity reduces next week
- US CPI data (due next week) → can it cool yields?
- Any fresh development on India–US mini trade package / tariff rollback news
- Whether crude corrects below $76–77 quickly
Until FIIs turn consistent buyers again or oil cools off meaningfully, Nifty may remain volatile in the 25,200–26,000 range in the near term.
