The Indian stock market benchmarks, the Sensex and the Nifty 50, suffered heavy intraday losses on Monday, 12 October, tracking weak Asian markets. The Sensex crashed more than 700 points, or nearly 1%, to an intraday low of 71,742.51, while the NSE counterpart Nifty 50 dropped 0.85% to touch the day’s low of 22,331. However, the mid and small-cap segments exhibited resilience, as the Nifty Midcap 150 climbed by 0.60%, while the Nifty Smallcap 250 jumped 1.4% during the session.
Why are the Sensex and Nifty down today? Key factors explained
The decline in the equity benchmarks can be largely attributed to the following three factors:
1. Selloff in the banking, IT, and other heavyweight stocks
Banking and IT have the most weight in the Sensex and the Nifty 50. So, a selloff in banking and IT stocks dragged the benchmarks lower. The Nifty Bank index declined 1%, while the Nifty IT index plunged 1.2% during the session.
However, the losses were not confined to only banking and technology stocks. Most heavyweight stocks witnessed strong profit-booking amid weak global cues and elevated oil prices.
Around 2 pm, the Sensex was down about 0.80%, with 23 stocks in the red. Bharti Airtel, ICICI Bank, Reliance, IT, L&T, and SBI were the top drags on the Sensex at that time.
2. Dollar near 18-month high
The dollar index traded near 102.5, an 18-month high, on Monday amid an escalating US-Iran conflict, keeping investors worried about inflation and its impact on the overall economy.
The dollar’s rise is a major negative for emerging-market currencies like the rupee and for overall market sentiment. The dollar index is up 1% so far in October after a 2% jump in September.
When the dollar strengthens, investors tend to prefer US assets over emerging markets such as India. This triggers FPI selling, which puts pressure on the Sensex and Nifty.
3. Massive FPI selling
Massive foreign capital outflows are a major reason for the downtrend in equity benchmarks. As per NSDL, foreign portfolio investors (FPIs) have sold off Indian stocks worth ₹44166 crore in October till Friday. So far in 2026, they have offloaded Indian stock worth ₹3,04,468 crore.
“The massive FPI selling is the primary reason why the Indian market is underperforming this year with negative Nifty returns YTD in 2026,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments, noted.
“FPIs pulling money out of India is rational since the risk-free return from the 10-year US bonds is above 5.2%. So long as the US bond yields remain elevated, FPIs will continue to sell. The scenario will change when the valuations become attractive, and the risk-reward ratio turns favourable for investment. Elevated crude prices and high US bond yields are the two strong headwinds for the market now. So long as these headwinds remain strong, the market will remain under pressure,” said Vijayakumar.
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