Stock market crashes: Sensex down 700+ points, Nifty falls nearly 300 | Why is stock market falling?
PTC Web Desk: The Indian stock market witnessed a sharp decline on Monday, with the Sensex falling over 700 points and the Nifty slipping nearly 300 points in early trade. Despite the recent Budget announcements, global trade tensions and sustained foreign investor selling have significantly impacted market sentiment.
By 10 am, the S&P BSE Sensex had dropped 707.67 points to 76,798.20, while the NSE Nifty50 was down 242.55 points, trading at 23,239.60. Barring the Nifty Consumer Durables index, which saw some gains due to tax relief measures announced in the Union Budget, all other sectoral indices were in the red. Stocks from banking, IT, metal, and energy sectors bore the brunt of the sell-off, dragging the indices lower.
Market experts attribute the downturn to multiple global and domestic factors. The primary concern is the renewed trade tensions after the United States imposed fresh tariffs on its key trading partners—Mexico, Canada, and China—over the weekend. Washington announced a 25% tariff on imports from Mexico and Canada and a 10% tariff on Chinese goods, escalating fears of a potential trade war. This development has triggered a global market rout, with Indian equities also feeling the pressure.
Adding to the turmoil, foreign portfolio investors (FPIs) have continued to offload Indian stocks. In January alone, FPIs pulled out nearly Rs 1 lakh crore from Indian equities. Analysts suggest that investors are closely monitoring whether this selling trend persists post-Budget. Experts say despite India's limited direct exposure to US tariffs, the global market impact has been significant. "The Budget's sectoral changes and the uncertainty around RBI's upcoming Monetary Policy Committee meeting have also contributed to investor caution," they added.
Another factor weighing on the markets is the sharp depreciation of the Indian rupee. On Monday, the rupee hit a record low of Rs 87.07 against the US dollar as global currency markets reacted to the fresh trade tensions. The strengthening of the US dollar has put additional pressure on Asian currencies, including the rupee, which fell by 0.5% in early trade.
Experts say foreign investors had already been cautious ahead of the Budget, and US President Donald Trump's tariff announcements have added another layer of uncertainty. "FPIs will play a crucial role in determining whether the market stabilizes or continues to decline," he said.
- With inputs from agencies