Closing Bell: Sensex crashes 770 points; Nifty ends below 25,100 - Anil Singhvi explains market fall

Stock markets witnessed a sharp sell-off in the final hour of trade ahead of the long weekend, driven mainly by weak investor sentiment, profit booking and caution ahead of the monthly derivatives expiry, market expert and Zee Business Managing Editor Anil Singhvi said on Friday.

The BSE Sensex closed at 81,537.70, down 769.67 points or 0.94 per cent, while the NSE Nifty 50 ended at 25,048.65, slipping 241.25 points or 0.95 per cent.

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Broader markets underperformed as the Nifty Next 50 fell 1.97 per cent, and midcap and smallcap indices declined between 1.7 per cent and 2.1 per cent.

On the Sensex, gains were seen in Tech Mahindra, Hindustan Unilever, Infosys, Asian Paints and TCS, while losses were led by Adani Ports, Eternal, IndiGo, Axis Bank and Bajaj Finserv.

Sectorally, FMCG and IT showed relative resilience, while sharp declines were recorded in realty, media, PSU banks and financial services. Banking, auto, metals, pharma and oil and gas indices also ended in the red, reflecting broad-based selling across the market.

Why Stock Market Is Falling?

Singhvi said the key reason behind the sharp fall was fragile market sentiment rather than any single negative trigger. “The biggest reason for today’s fall is weak sentiment. Sentiment is not driven by one factor but by a combination of several negative cues,” he said.

He added that when sentiment turns weak, market movements become sharp and frequent even without changes in fundamentals. “Company earnings or production do not change every minute. What changes every minute is price, and price reacts to sentiment,” Singhvi said.

Singhvi said investors were cautious ahead of the long weekend, with markets shut on Monday and a monthly derivatives expiry scheduled on Tuesday. “Ahead of a long weekend, investors prefer to reduce risk. The fear of negative news during market holidays is always higher than the expectation of positive news,” he said.

He also pointed to persistent selling by foreign institutional investors (FIIs) as a key pressure point. “The direction of FIIs is clear. Whenever the market rises, they sell. When markets fall, they slow down selling but do not turn buyers,” Singhvi said.

According to him, markets have struggled to sustain higher levels, leading to repeated sell-offs at upper ranges. “Markets are unable to hold on to higher levels. Every rise is being used to lighten positions,” he said.

Singhvi said mid-cap and small-cap stocks saw sharper declines, which have further impacted retail investor sentiment. He noted that both mid-cap and small-cap indices fell close to 1.5–2 per cent, making the fall more uncomfortable for retail participants.

He also advised investors to focus on risk management in such volatile conditions. “This is a market where risk management is more important than return chasing. Both intraday and overnight positions should be kept light,” Singhvi said.

Commenting on the sharp fall in Adani Group stocks, Singhvi said stocks react quickly to negative triggers, especially during weak market conditions. “In a weak sentiment environment, bad news impacts prices faster than good news lifts them,” he said.

Singhvi reiterated that volatility may continue in the near term due to expiry-related activity and weak sentiment. “Markets can remain volatile. Big moves are coming on both sides, so position sizing becomes critical,” he added.

He advised investors to remain calm and avoid unnecessary stress. “Markets go through such phases repeatedly. Panic only worsens decision-making. Focus on discipline and risk control,” Singhvi said.