Sensex, Nifty Fall for 5th Day: Key Reasons Behind the Market Decline

The Indian stock market continued its downward trajectory for a fifth consecutive session on Thursday, September 25, 2025. A combination of persistent selling by foreign investors, negative global cues, and concerns surrounding the IT sector pushed the benchmark indices, Sensex and Nifty 50, to close deep in the red.

Thursday’s Market Performance in Numbers

The 30-share BSE Sensex concluded the day at 81,159.68, a significant drop of 555.95 points or 0.68%. Similarly, the NSE Nifty 50 settled at 24,890.85, down by 166.05 points or 0.66%. The broad-based sell-off led to a substantial erosion of investor wealth, with the total market capitalization of BSE-listed companies falling by nearly ₹3 lakh crore in a single day.

The negative sentiment was not confined to the large-cap stocks. The broader markets also faced selling pressure, with the Nifty MidCap 100 and Nifty SmallCap 100 indices declining by 0.64% and 0.57% respectively, indicating widespread market weakness.

Key Factors Driving the Decline

Several factors contributed to the pessimistic sentiment on Dalal Street:

• Weak Global Cues: Indian markets mirrored the weakness in global equities. Concerns about a potential global economic slowdown and hawkish stances from international central banks have made investors risk-averse.
• Sustained FII Outflows: Foreign Institutional Investors (FIIs) continued their selling spree. On the previous day, Wednesday, September 24, FIIs were net sellers of Indian equities worth ₹2,425.75 crore. While Domestic Institutional Investors (DIIs) provided some support with net purchases of ₹1,211.68 crore, it wasn’t enough to counter the foreign outflow.
• US H-1B Visa Concerns: Proposed changes and fee hikes in the US H-1B visa program have raised concerns for the Indian IT industry, a heavyweight sector in the benchmark indices. This uncertainty triggered a sell-off in major IT stocks.
• Profit Booking: Following a strong rally in previous months, the market is currently in a corrective phase. Many investors are booking profits amidst the growing uncertainty.

Sectoral and Stock-Specific Highlights

Most sectoral indices ended the day with losses. The Nifty Realty index was the hardest hit, falling by 1.65%, followed closely by the Nifty IT index, which dropped 1.27%. The auto and pharma sectors also witnessed significant selling. However, bucking the trend, the Nifty Metal index managed to close in the green.

Among the Nifty 50 constituents, the top losers included Trent (down 3.61%), Power Grid Corporation (down 3.10%), and Tata Motors (down 2.64%).

On the other hand, top gainers of the day were Bharat Electronics (BEL) (up 2.07%), Hero MotoCorp (up 1.51%), and Hindalco (up 0.80%).

Investor Outlook: What’s Next?

With the market in a corrective phase, investors are advised to proceed with caution. Key factors to monitor in the coming days include:

• Global Market Trends: The direction of global markets, especially in the US, will continue to be a major influencer.
• FII/DII Activity: The flow of institutional money will be crucial. A reversal in the FII selling trend could bring much-needed relief to the market.
• Upcoming Macroeconomic Data: Investors will be closely watching key domestic and global economic data for insights into the future economic outlook.
• Technical Levels for Nifty: Having breached the psychological 25,000 mark, the Nifty 50’s next crucial support level is seen around 24,800. On the upside, the 25,200 level is expected to act as a significant resistance.

For long-term retail investors, market corrections can present opportunities to accumulate quality stocks at more attractive valuations. However, adopting a staggered investment approach, such as through Systematic Investment Plans (SIPs), is recommended over lump-sum investments in a volatile market.

Disclaimer: This article is for informational purposes only and should not be considered investment advice. Please conduct your own research before making any investment decisions.