What are the main reasons for Sensex’s decline today?
Main Reasons for Sensex’s Decline Today (May 27, 2025)
Profit Booking After Recent Rally
Investors booked profits following a strong run-up in the past two weeks, leading to selling pressure, especially in heavyweight sectors like financials and IT.
Weak Asian and Global Cues
Subdued sentiment in Asian markets, with most indices in the region slipping early in the day, contributed to a risk-off environment for Indian equities. Concerns over global trade tensions and central bank policies also weighed on sentiment.
Muted Q4 Earnings Growth
The earnings growth for Nifty50 companies in Q4 was less than 6% year-on-year, falling short of market expectations and dampening investor confidence.
Rising U.S. Treasury Yields
Higher U.S. Treasury yields triggered risk aversion in global equities, prompting caution and outflows from emerging markets like India.
Disappointment Over RBI Dividend
The Reserve Bank of India’s dividend announcement did not meet some market expectations, further adding to the negative sentiment.
Sectoral Pressure from Heavyweights
Major stocks such as HDFC Bank, ICICI Bank, Reliance Industries, and Infosys led the decline, dragging the indices lower. IT, financials, auto, FMCG, and oil & gas sectors were among the worst performers.
Monthly Derivatives Expiry
The monthly expiry of derivatives contracts added to volatility and selling pressure in the market.
Stock-Specific and Sectoral Issues
Renewed concerns over price wars in the automobile sector and worries about fresh US tariffs affecting Apple suppliers also contributed to the decline.
The Sensex’s fall today was driven by profit booking after a recent rally, weak global and Asian cues, muted earnings, rising U.S. yields, disappointment over the RBI dividend, sectoral weakness, and monthly expiry-related volatility.
