Stock market crash: Sensex falls 700 points today. Here's why

Stock market crash: The biggest loser is Nifty Pharma as Pharma stocks retreated by around 1.5%. All sectoral indices were trading in the red today.

Stock market crash: Sensex today fell over 700 points and Nifty shed nearly 1% as it was reported that foreign investors offloaded stakes in bluechips. Smallcaps and midcap indices were largely unaffected. Within Nifty50, Sun Pharma fell almost 4% while Maruti Suzuki, Titan, Cipla, JSW Steel, Power Grid and ONGC traded around 2% lower. The biggest loser is Nifty Pharma as Pharma stocks retreated by around 1.5%. All sectoral indices were trading in the red.

Sensex' performance this week

Stock market crash: People look at a screen displaying the Sensex results on the facade of the Bombay Stock Exchange (BSE) building in Mumbai. (Reuters)

The Sensex crash comes after the it soared past the 75,000 mark on Tuesday this week while market capitalisation of all listed stocks on BSE achieved the new milestone of ₹400 lakh crore on Monday.

Here's why stock market is falling today:

1. US inflation: Hotter-than-expected inflation data in the US dampened hopes that the Federal Reserve would begin cutting interest rates as early as June. This means that the Fed is worried that inflation progress might have stalled before the March inflation data, Bloomberg reported.
2. Bond yields: US inflation spiked the US bond yields as the US 2-year yield is up around 400 bps while 10-year yield is higher by about 340 points. Higher yields are negative for FPI inflows.
3. Rising commodity prices: Prices of commodities like gold, silver, zinc, copper, cocoa and coffee have been rising which shows rising inflation.