Sensex Plunges 700 Points as Global Chip Sell-Off Triggers Sharp Market Correction

Sensex Plunges 700 Points as Global Chip Sell-Off Triggers Sharp Market Correction​

Benchmarking indices faced significant volatility on Tuesday after the dramatic decline of South Korea's KOSPI drove a sharp sell-off across Asian markets. The Indian stock market witnessed immediate profit booking, leading to a rapid drop in the Sensex within one hour trading session. This decline came alongside mounting concerns over domestic economic data and regulatory cautionary signals from international regulators regarding technology stocks.

KOSPI Crash Sparks Global Tech Overhang​

The primary catalyst for the widespread market correction was the severe fall seen on the KOSPI, which closed nearly 10% lower. The benchmark index plunged 910.71 points to close at 8,203.84 points, marking its steepest daily drop in over three months.

The collapse was concentrated among chipmakers, with market giants like Samsung Electronics and SK Hynix shedding more than 12% each. These heavyweights now account for over half of the KOSPI's total value. The volatility led to an automatic 20-minute trading halt on the bourse after significant losses were recorded.

A South Korean regulator noted that the government was too hasty in approving leveraged funds tied to major chip stocks, which had been introduced last month. Regulators have cautioned retail investors regarding margin debt, which rose to a record high in June due to heightened market activity.

Indian Indices Face Mid-Day Plunge Amid Economic Slowdown​

The selling pressure quickly migrated into the domestic markets. The Sensex, trading at 77,191 at 11:20 am, saw a steep decline of 700 points in just over an hour, settling at 76,510. This hourly drop translates to nearly a 1% fall.

Despite the international tech scare, Indian indices also contended with domestic economic headwinds. Both Nifty 50 and Sensex slipped in afternoon trading after data showed that India's private sector growth had eased to a three-month low for June. Services activity saw a downturn, falling to a 17-month low.

Manufacturing growth also slowed down, registering at a three-month low, adding layers of caution to the market sentiment on Tuesday.

Final Trading Figures Reflect Steep Decline​

Both major benchmarks opened flat but finished with notable declines as concerns over global tech stability met easing domestic growth signals. The Nifty 50 closed at 23,824.10, reflecting a decline of 1.16%. The Sensex completed the trading day at 76,200.68, also registering a 1.16% drop in value.