As of January 7, 2025, the Indian stock market has plunged dramatically, with the Sensex falling by 1,258.12 points (1.59%) to close at 77,964.99 and the Nifty dropping 388.70 points (1.62%) to 23,616.05. This sharp decline is primarily attributed to the emergence of the Human Metapneumovirus (HMPV) in Bangalore, where the first two cases were confirmed, raising alarm among investors about potential health impacts on the economy [ffebf4c4].
The market's freefall has resulted in a broad-based sell-off, with midcap and smallcap indices also experiencing declines of 2-3%. Investors have collectively lost approximately ₹10.98 lakh crore amid fears surrounding Q3 earnings and foreign institutional investor (FII) outflows, exacerbated by a strong dollar and high US bond yields [ffebf4c4].
Earlier in the week, the Nifty 50 had shown signs of recovery, climbing above the 23,750 mark, driven by positive developments in the auto sector and iron ore production [401684ef]. However, the recent virus outbreak has significantly altered market sentiment, leading to a 14% spike in the India VIX, reflecting increased volatility and investor anxiety [9157572f].
Major companies such as Tata Steel, NTPC, and Reliance Industries were among the biggest laggards, contributing to the overall negative performance across all sectoral indices, which closed in the red [ffebf4c4]. Despite Morgan Stanley predicting a potential 14% upside for the Sensex by December 2025, the immediate outlook remains uncertain as analysts urge caution in light of the ongoing health concerns and economic instability [ffebf4c4][401684ef].
As the situation develops, market participants are closely monitoring the implications of the HMPV outbreak and its potential impact on economic recovery, especially in the context of the Reserve Bank of India's earlier optimistic GDP growth forecasts [9157572f].