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Stock Market Crash : Sensex crashes 1,400 points, Nifty below 22,150; 6 reasons why stock market is falling today
As investors awaited important GDP data and responded to new remarks made by US President Donald Trump on tariffs, the Indian benchmark equity indices, the Sensex and Nifty, struggled on Friday due to index heavyweights in the banking and IT sectors.
At approximately 13:30 pm, the Nifty50 fell below the 22,150 line, and the BSE Sensex plummeted 1,400 points to 73,189.
To reach Rs 383.49 lakh crore, the market capitalization of all companies listed on the BSE fell by Rs 9.61 lakh crore.
Following a decline in chipmaker Nvidia, Nifty IT index stocks dropped as much as 4% in early trading, mirroring overnight losses on Wall Street. The biggest losses were Mphasis, Tech Mahindra, and Persistent Systems.
In contrast,
Nifty Bank, Metal, Pharma, Consumer Durables, and Oil & Gas indexes opened more than 2% lower than the Nifty Auto index.
The Indian stock market experienced a significant downturn today, with the Sensex dropping over 1,000 points and the Nifty 50 falling by more than 1.2% in early trading. A combination of global and domestic factors has influenced this decline. Below are the key reasons contributing to today's market fall:
Global Trade War Concerns
U.S. President Donald Trump announced a 25% tariff on imports from Canada and Mexico, effective March 4, along with additional proposed tariffs on China. This has reignited fears of a global trade war, leading to negative sentiments across global markets, including India.Weakening U.S. Economy
Recent data indicates a slowdown in the U.S. economy, with rising jobless claims and increasing inflation concerns. This has led to apprehensions about global economic stability, affecting investor confidence in emerging markets like India.Foreign Investor Sell-Off
Foreign Institutional Investors (FIIs) have been withdrawing funds from the Indian market, seeking better returns elsewhere. Since October 2024, there has been a notable $25 billion sell-off by foreign investors, contributing to the market's decline.Rupee Depreciation
The Indian rupee weakened to 87.3850 against the U.S. dollar, approaching a key support level where the Reserve Bank of India (RBI) had previously intervened. A weaker rupee makes Indian assets less attractive to foreign investors, leading to further market pressure. citeturn0news24
Concerns Over Corporate Earnings
Corporate profit growth for Nifty 50 companies was only 5% in the October-December quarter, marking the third consecutive quarter of single-digit increases. This slowdown in earnings has raised concerns among investors about the future profitability of Indian companies.- Regulatory Changes
The Securities and Exchange Board of India (SEBI) introduced a new 'specialized investment fund' (SIF) category targeting wealthier investors, operational from April 1. While aimed at providing varied investment strategies, such regulatory changes can introduce uncertainty, affecting market sentiment.
In summary, today's decline in the Indian stock market is the result of a confluence of global trade tensions, domestic economic challenges, foreign investor behavior, currency fluctuations, and regulatory changes. Investors are advised to stay informed and consider these factors when making investment decisions.
