Why the market is in the red today: Stock market crash: Sensex closes down 1,258 points after three confirmed HMPV cases spooked investors

After the Indian government confirmed two cases of human metapneumovirus (HMPV) in Karnataka and one in Gujarat and reports of a virus outbreak in China caused chaos, stock market investors decided to play it safe. As a result, the Sensex ended with a loss of around 1,258 points and the Nifty lost around 1.6%.

The India VIX fear index jumped 16% amid widespread sell-off in mid- and small-cap stocks and across various sectors. The Sensex closed below the 78,000 mark while the Nifty plunged to the 23,616 mark.

The worst-hit sectors included metals, PSU banks, real estate, oil and gas and financials. Shares of Union Bank of India fell 8% while IREDA, Adani Energy Solutions, Bank of Baroda, HPCL, SJVN, IRFC, YES Bank and RVNL closed around 5-7% lower.

Among heavyweights, HDFC Bank, Reliance Industries (RIL) and Kotak Mahindra Bank were among the biggest drags on the Sensex.

What caused the stock market crash today?

While investors were focused on tracking earnings updates and expectations around the third-quarter earnings season that begins this week, as well as developments surrounding the Trump presidency and geopolitical issues, they were caught off guard by the news of HMPV in India .

While confirming the discovery of two HMPV cases in Karnataka, the Union Health Ministry said the cases were found through routine surveillance for several respiratory viral pathogens as part of ICMR’s ongoing efforts to monitor respiratory diseases across India. No history of international travel. While the three-month-old female child who was diagnosed with HMPV after being admitted to Baptist Hospital in Bengaluru with a history of bronchopneumonia was discharged, an eight-month-old male child was discharged on January 3 who was positive for HMPV was tested in 2025, is now recovering.Also read | HMPV cases in India: Health Ministry confirms two cases in Karnataka

“It is emphasized that HMPV is already circulating worldwide, including in India, and cases of HMPV-related respiratory illnesses have been reported in various countries. Based on recent data from ICMR and the Integrated Disease Surveillance Program (IDSP) network, “There has been no unusual increase in cases of influenza-like illness (ILI) or severe acute respiratory illness (SARI) in the country,” the health ministry said.

A statement said the ministry was monitoring the situation through all available monitoring channels.

“ICMR will continue to monitor trends in HMPV circulation throughout the year. The World Health Organization (WHO) is already providing timely updates on the situation in China to provide further information on ongoing measures. The recent preparedness exercise conducted across the country demonstrated that this is the case in India.” “We are well equipped to deal with a possible increase in respiratory illnesses and public health measures can be deployed promptly if necessary,” said the ministry.

The stock market has already been hit by FII outflows, which have already reached about half a billion dollars so far in January, according to NSDL data.

“The market is likely to be influenced by the negative factors impacting FII flows and some positive domestic factors that can support the market. The external macro construct remains unfavorable with the dollar index at 109 and the US 10-year bond yield at 4.62. “FIIs are likely to continue selling until yields fall and the dollar stabilizes,” said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.