India’s share market indices, Sensex and Nifty50, ended the day’s trade in red on Thursday, May 22, 2025. The Sensex (index with top 30 firms) tumbled 644.64 points to close at 80,951.99 on Thursday. Meanwhile, Nifty50 (index with top 50 firms) was down 203.75 points to close at 24,609.70 points.
In the morning, the Sensex tumbled 273.58 points to open at 81,323.05. Moreover, Nifty50 was also down 79.50 points to open at 24,733.95 points.
Indian share market closed in red on Thursday as global sentiment remained weak due to rising concerns over debt and deficit levels in the United States. Furthermore, the pressure in the bond markets worldwide has impacted investor mood, as markets reacted to US President Donald Trump’s debt financing and spending plans.
Key Factors Behind The Share Market Drop
- Worries About Mounting US Debt: The pressure was created on the equities as markets reacted to US President Donald Trump’s debt financing and spending plans. “Trump’s tax bill is expected to be voted on this week in Congress, and investors are worried it could add about $3.8 trillion to the $36 trillion US debt pile,” said a report by Reuters.
- Rising Tensions In The Middle East: Several media are cautioning about the escalating tensions between Iran and Israel. This has further stressed the investors’ confidence and seem to have hit their risk appetite. A report by CNN claimed that the US’s intelligence, suggest that Israel may be preparing for a potential military strike targeting Iranian nuclear facilities.
- Absence Of Positive Catalysts: According to market experts, the domestic market needs new catalysts to break out. Currently, it’s range-bound, awaiting clarity on US-India trade talks, and has already priced in slow economic growth and earnings revival from Q1 FY26. Experts believe macroeconomic data and earnings growth will drive market direction moving forward.
- High Valuations: Recent rally in India’s equity market has led to high valuations for large-caps and lofty prices for mid- and small-caps. This sparked concerns of a potential significant correction.
- Disappointing Market Reaction To Q4 Earnings Results: The companies’ reported mixed Q4 earnings results, which disappointed investors.
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