Revival of FII investment in India will happen when economic growth and corporate earnings revive, says V K Vijayakumar of Geojit Financial Services. (AI image)
Stock market crash today: BSE Sensex and Nifty50, the Indian equity benchmark indices, plunged in trade on Monday. While BSE Sensex tanked over 800 points, Nifty50 went below 22,600. At 10:28 AM, BSE Sensex was trading at 74,543.15, down 768 points or 1.02%. Nifty50 was at 22,565.90, down 230 points or 1.01%.
Indian equity benchmarks declined for the fifth consecutive session on Monday, reflecting global market weakness after US equities dropped due to worries about declining consumer demand and potential tariff impositions. All sectors experienced downward pressure.
The total market value of BSE-listed firms reduced by Rs 5.07 lakh crore to Rs 397.13 lakh crore.
American consumer confidence fell to its lowest point in 15 months during February, with inflation expectations rising amidst worries regarding former President Donald Trump’s proposed tariff policies, according to recent statistics.
Most Asian markets showed negative performance, following the downward trend seen on Wall Street on Friday due to growth-related concerns.
Zomato, HCL Tech, TCS, Tech Mahindra, HDFC Bank, and IndusInd Bank began trading lower, whilst Sun Pharma, Maruti, M&M, Bajaj Finserv, and Nestle India showed positive movement in early trading.
In sectoral performance, the Nifty IT index fell by 1.8%, with LTTS, Persistent Systems, and Coforge leading the decline. Nifty Financial Services, Media, Metal, PSU Bank, Realty, and Consumer Durables indices all opened more than 1% lower.
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Why stock market is falling today
1) Consumer Confidence Declines in US
Global markets
retreated following an unexpected reduction in US services activity, influenced by tariff concerns and rising costs. Reports indicated the White House was urging Mexico to implement tariffs on Chinese goods.
American consumer confidence decreased significantly in February, reaching its lowest point in 15 months as inflation outlook increased. The University of Michigan’s Consumer Sentiment Index reduced to 64.7 from 71.7 in January, below analysts’ forecasts. Citizens voiced worries about how President Donald Trump’s tariff policies might affect their spending capacity.
2) Economic Growth and Inflation Concerns
The US faces challenges with declining growth alongside rising inflation, creating market uncertainty. This situation impacts export-focused industries, including Indian IT, whilst making developing markets less desirable for international investors, who might prefer secure investments like US dollars and treasury bonds.
The Nifty IT index fell 1.8% today, with LTTS, Persistent Systems, and Coforge showing losses.
3) Markets Await Inflation Statistics
Investors remain cautious before Friday’s release of the Federal Reserve’s main core inflation indicator. Analysts expect the figure to decrease to 2.6% from 2.8%, though tariff-related worries might diminish its significance.
Further complexity arises as nine Fed officials are due to speak this week, likely maintaining a prudent approach regarding interest rate reductions.
4) Ongoing Foreign Investment Outflow
Foreign portfolio investors have withdrawn Rs 1,01,737 crore net from
Indian equities
in 2025 to date, as per NSDL figures.
According to Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, “FII selling continues unabated in the Indian stock market. After Trump’s victory in US presidential elections, the US market has been attracting huge capital inflows from the rest of the world. But recently, China has emerged as a major destination of portfolio flows. The Chinese president’s new initiatives with their leading businessmen have kindled hopes of a growth recovery in China. Since Chinese stocks continue to be cheap, this ‘Sell India, Buy China’ trade may continue. But this trade has happened in the past and experience is that it will fizzle out soon since there are structural problems constraining Chinese economic revival. Revival of FII investment in India will happen when economic growth and corporate earnings revive. Indications of that are likely to happen in two to three months.”
