indian stock market crashes: US President Donald Trump has announced to impose 25% tariff on Canada and Mexico after assuming office. Due to this the Indian stock market got scared. Both Sensex and Nifty crashed. BSE Sensex fell by more than 1200 points while Nifty 50 also fell below 23,000 points. Due to this decline, the market cap of all BSE listed companies decreased by Rs 7.55 lakh crore to Rs 425.35 lakh crore.
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The market fell due to decline in heavy weighted stocks like Reliance Industries, ICICI Bank, Zomato, SBI and HDFC Bank. So far, the third quarter results of most domestic companies have been below expectations. This has had a negative impact on investor sentiment.
Decline in small cap: In volatile trading, BSE’s 30-share benchmark Sensex fell 1,235.08 points, or 1.60 per cent, to a seven-month low of 75,838.36. Apart from this, a decline of 1.94 percent was also recorded in the BSE Smallcap index of small companies and a decline of two percent in the Midcap index of medium companies.
All-round decline: Due to this all-round decline, the total market capitalization of companies listed on BSE fell by Rs 7,52,520.34 crore to Rs 4,24,07,205.81 crore ($4.90 lakh crore). Foreign institutional investors also sold heavily. According to stock market data, foreign institutional investors sold shares worth Rs 5,920.28 crore on Tuesday.
This was the effect of decline
1. Uncertainty about Donald Trump’s trade policy
US President Donald Trump has threatened to increase tariffs on many countries including India. Their visa policies may also impact the Indian technology sector. Trump has announced to impose 25 percent tariff on Canada and Mexico. He also has a slant on India. Its effect was visible on the Indian market today.
2. Signs of weakness in the Indian economy
There are signs of weakness in the Indian economy, due to which there is an atmosphere of caution in the market. The pace of GDP has slowed down to its lowest level in two years. There is no increase in demand in the market. This is also affecting market sentiment.
3. Cautious stance regarding the budget
The country’s budget will be presented on 1 February. After Trump, investors are now eyeing the budget. Any disappointment in expectations could further blow the already weak market sentiment. This also affected the market.
4. Weak results of the quarter
After the decline in the first and second quarter earnings of the companies, there has been no significant improvement in the December quarter earnings too, with mixed trends seen across various sectors.
5. Selling by foreign investors
Amid the strengthening of the US dollar and increase in bond yields, foreign portfolio investors (FPIs) are continuously withdrawing money from the Indian market. This is one of the major reasons for the decline in the Indian stock market in recent months. Edited by: Sudhir Sharma
