Why Monday’s US Stock Market Crash Didn’t Hurt Sensex, Nifty Today

The domestic equity benchmarks settled on a flat-to-positive note on March 11, 2025, feeling almost no heat from the deep rout in the US stock market a day earlier. Initially, tracking weak global cues, both the BSE Sensex and NSE Nifty opened the day with a ‘gap-down’ and slipped further to the day’s low at 73,663.60 and 22,314.70, respectively.

However, soon the indices staged a smart recovery and rebounded. The Sensex closed at 74,102.32, down a marginal 12.85 points, or 0.02 per cent. The Nifty, however, ended up by 37.60 points, or 0.17 per cent, at 22,497.90.

The broader market remained mixed, with the Nifty Smallcap 100 shedding 0.8 per cent and the Nifty Midcap 100 gaining 0.67 per cent.

Sundar Kewat, technical and derivatives analyst, Ashika Institutional Equity says: “The gap-down opening was primarily influenced by global market sentiment after Goldman Sachs lowered its 2025 US GDP forecast from 2.4 per cent to 1.7 per cent, citing a weaker economic outlook. This triggered a broad-based sell-off in global and Asian markets.”

The US stock market saw one of the worst crashes so far this year on March 10, 2025. The benchmark S&P 500 fell 2.7 per cent, its biggest single-day fall this year. The Nasdaq Composite crashed 4 per cent, its largest one-day decline since September 2022. The Dow Jones Industrial Average also slipped 2.08 per cent.

According to a Reuters report, this sell-off had wiped out $4 trillion from the S&P 500’s peak last month

What Shielded Sensex, Nifty from US Market Crash

India’s stock market often mirrors the US market due to the interconnected nature of global economies and investor behaviour. The US, being a major global economic leader, heavily influences worldwide investor sentiment, including in India. However, in today’s session, Indian equities bucked the trend. Here are the reasons.

Weaker US Dollar Index: The US dollar weakened to its lowest level since November 2024 as the Indian rupee strengthened, likely supported by the Reserve Bank of India’s (RBI) intervention.

According to a Reuters report, the RBI was likely selling dollars on March 11 to support the rupee.

According to Dilip Parmar, senior research analyst, HDFC Securities, the rupee strengthened due to the better performance of regional currencies against the dollar and the weakening of the dollar amid recession fears.

Saurabh Bansal, founder, Fin@Work Wealth Services, said, "The weakening Dollar Index has led to capital shifting away from the US, with India emerging as an attractive investment destination."

Lower Crude Oil Prices: Brent crude’s May 2025 futures traded around $70 per barrel on March 11, near its six-month lows. The lower crude oil prices also worked in supporting India’s market.

According to Bajaj Broking Research, the “sustained price below the $72-75 mark is positive for India's economic outlook.”

Falling US 10-year Treasury Yield: The benchmark 10-year US Treasury yields declined in the previous session as investors sought safety amid growing fears of an economic slowdown in the US. The yield, on March 11, stood at 4.23 per cent, down by 57 basis points (bps) from its peak of 4.80 per cent hit on January 14, 2025.

“This decrease in yield will have a positive impact on emerging markets like India,” Bajaj Broking Research said.

Valuation Corrections in Indian Equities: Bansal said, "After five months of correction, Indian equities are now offering more reasonable valuations."

Vinod Nair, head of research, Geojit Financial Services, explained that the relatively lower volatility in Indian stocks could be attributed to a moderation in valuations following recent corrections. Supportive factors, such as falling crude oil prices, an easing dollar index, and expectations of a rebound in domestic earnings also supported investor sentiments, he said.

“These elements are expected to contribute to stability amid prevailing trade uncertainties. Meanwhile, attention remains on the upcoming retail inflation data, which could provide insights into potential interest rate cuts,” he added.