Why Are Indian Stock Markets Plummeting? Insights into Current Trends
Market Overview
Mumbai: On Monday morning, the key equity indices, Sensex and Nifty, experienced a significant drop, influenced by negative trends in Asian markets and escalating global trade worries.
Additionally, the sentiment among investors was dampened by foreign fund withdrawals, as noted by market analysts.
The BSE Sensex fell sharply by 762.24 points, reaching 80,688.77 during early trading, while the NSE Nifty decreased by 212.25 points to settle at 24,538.45.
Among the companies listed on the Sensex, major declines were seen in HDFC Bank, HCL Tech, Reliance Industries, Infosys, Tech Mahindra, Bajaj Finance, Larsen & Toubro, Titan, Tata Consultancy Services, and Tata Steel.
Conversely, Hindustan Unilever, Adani Ports, Mahindra & Mahindra, IndusInd Bank, and Nestle showed gains.
Asian markets reflected a downward trend, with South Korea's Kospi, Japan's Nikkei 225, Shanghai's SSE Composite, and Hong Kong's Hang Seng all trading lower.
On Friday, US markets closed with mixed results.
Data from exchanges indicated that Foreign Institutional Investors (FIIs) sold equities worth Rs 6,449.74 crore on Friday.
US President Donald Trump announced on Friday a doubling of tariffs on steel imports to 50 percent.
"The current market dynamics suggest a continuation of the consolidation phase. Global challenges, such as renewed tariff issues, are likely to hinder any breakout rally. However, domestic factors are providing support at lower levels. Trump's 50 percent tariffs on steel and aluminum signal ongoing uncertainty in trade policies, which will affect market performance," stated V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
The Indian economy demonstrated stronger-than-expected growth in the last quarter of the fiscal year 2024-25, achieving a 6.5 percent growth rate and elevating its size to USD 3.9 trillion, with prospects of surpassing Japan as the world's fourth-largest economy by FY26.
In the fourth quarter of FY25, the Indian economy expanded by 7.4 percent, driven by increased private consumption and robust growth in construction and manufacturing sectors.
Vikas Jain, Head of Research at Reliance Securities, remarked, "Negative signals from global markets may limit gains. Asian markets and US index futures are under pressure due to rising geopolitical tensions between Russia and Ukraine, along with renewed trade conflicts following Trump's tariff increase on steel and aluminum to 50 percent."
The global oil benchmark, Brent crude, saw a rise of 2.20 percent, reaching USD 64.16 per barrel.
On Friday, the BSE Sensex fell by 182.01 points or 0.22 percent, closing at 81,451.01, while the Nifty decreased by 82.90 points or 0.33 percent to 24,750.70.