Stock Market Crash Today: BSE Sensex Tanks over 1,000 Points; Nifty50 Below 22,250 – Top Reasons for Bloodbath on D-Street
Why Stock Market is Falling Today?
The Indian equity market witnessed a sharp decline on Friday, with the BSE Sensex tanking over 1,000 points and Nifty50 falling below 22,250. The main factors influencing this market decline are:
1. Apprehension regarding GDP data
Economic growth concerns, declining earnings momentum, Trump’s trade policies, and continuous foreign investor selling have resulted in benchmarks falling 14% from their peak levels in late September. Investors are attentively monitoring the December quarter GDP figures, scheduled for release post-market hours on Friday. According to a Reuters survey of economists, India’s economy likely showed improvement during this period.
2. Trade Policy Uncertainty
Trump’s recent announcement shifted the implementation of 25% duties on Canadian and Mexican imports to March 4, advancing from the initial April 2 timeline. He also declared a 10% levy on Chinese imports whilst maintaining his stance on 25% tariffs for European Union shipments. These fluctuating trade decisions have led to increased market instability.
3. IT Sector Faces Downturn
Asian markets experienced a decline on Friday, with MSCI Asia ex-Japan dropping 1.21%, following Wall Street’s downward trend after Nvidia’s significant decrease. The technology sector experienced additional pressure as Nvidia’s earnings report sparked negative investor reaction, leading to widespread selling of AI-related stocks, including other "Magnificent Seven" companies. The Nifty IT index fell 3.2%, with notable declines in Persistent Systems, Tech Mahindra, and Mphasis, showing losses up to 4.5%.
4. Dollar Strengthens
The US dollar maintained positions near multi-week peaks against primary currencies amidst growing trade war concerns. The U.S. dollar index reached 107.35 on Friday against six major currencies. This strengthening creates challenges for emerging markets like India, increasing the cost of foreign investments and prompting equity capital outflows.
As the market plummets, investors are left grappling with uncertainty. The BSE listed firms’ total market value reduced by Rs 5.8 lakh crore, reaching Rs 387.3 lakh crore, according to an ET report. Early trading witnessed Nifty IT stocks declining up to 4%, influenced by the overnight downturn in US markets following Nvidia’s poor performance. Nifty Auto, Metal, Pharma, Consumer Durables, and Oil & Gas indices show decreases between 1-2%.
The support level at 22,500-22,400 appears to be crucial for the Nifty50 index in the near future, says Osho Krishnan of Angel One. The total market value of BSE-listed firms reduced by Rs 5.8 lakh crore, reaching Rs 387.3 lakh crore, according to an ET report. The recent declines indicate a need to re-evaluate investment strategies and consider alternative options, such as gold, silver, fixed deposits, and bonds.
What’s Next?
As the market continues to fluctuate, investors should remain cautious and attentive to developments in the global economy and trade policies. A diversified portfolio with a mix of equities, debt, and other assets can help mitigate the impact of market volatility. In the near future, the BSE Sensex and Nifty50 will likely be influenced by the upcoming election results, GDP data, and trade policy decisions.
Stay tuned for further updates and insights on the Indian equity market, and don’t hesitate to reach out to a financial advisor to discuss your investment options.
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