Why Market Down Today: Indian stock markets plunged amid reports of the virus outbreak in China after the Indian government confirmed two cases of human metapneumovirus (HMPV) in Karnataka and one in Gujarat. Following the development, investors turned cautious and tried to safeguard their capital, leading the Sensex to close at 77,964.99, down 1,258.12 points or 1.59 per cent, and the Nifty was down 388.70 points or 1.62 per cent at 23,616.05.

The top losers on the Nifty were Tata Steel, Trent, Coal India, NTPC and BPCL, while gainers were Apollo Hospitals, Tata Consumer, Titan Company, HCL Technologies.

All sectoral indices closed in the red, with PSU Bank falling 4 per cent, while Metal, Realty, Energy, PSU, Power and Oil & Gas declined 3 per cent each. The BSE Midcap index fell 2.4 per cent and the Smallcap index fell 3 per cent.

India VIX jumps 17%

India's fear index India VIX surged 17%, leading to widespread selling pressure in the market, especially in mid- and small-cap stocks. Sensex hit an intraday low of 77,782, while Nifty fell below 23,600.

Health Ministry statement: HMPV virus situation under control

The Health Ministry issued a statement in this regard, saying that the HMPV virus is already present around the world and cases have been reported in India as well. The ministry also informed that no unusual increase in severe acute respiratory illnesses (SARI) and influenza-like symptoms (ILI) has been observed in Indian states.

According to data from ICMR and IDSP network, HMPV cases are being monitored in the country. Along with this, the World Health Organization (WHO) is giving regular updates on the situation in China.

Foreign Institutional Investors (FIIs) selling and global situation

The stock market was already under pressure from FII selling, which has reached nearly half a billion dollars so far in January, NSDL data showed. According to Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the market is facing a mix of external negative influences and domestic positive factors and FII selling is likely to continue until US bond yields and the dollar index stabilize.

Potential risks and future situation

Dr. VK Vijayakumar also pointed out that "FII flows will continue to be negative on the market and investors should expect a decline in the US dollar and 10-year US bond yield in the near future."