The upcoming week is crucial for both the equity markets and the economy, as the Union Budget is set to be presented on February 1. (AI image)
Stock market crash today: BSE Sensex and Nifty50, the Indian equity benchmark Indices, crashed in trade on Monday. While BSE Sensex went below 76,000. Nifty50 was below 22,900. At 11:35 AM, BSE Sensex was trading at 75,579.63, down 611 points or 0.80%. Nifty50 was at 22,893.05, down 199 points or 0.86%.
The Indian stock markets experienced a downward trend for the second straight session on Monday, affected by multiple factors including poor corporate performance, US trade policy concerns, and ongoing foreign investor withdrawals.
The total market value of BSE-listed firms decreased by Rs 9.48 lakh crore, reaching Rs 410.03 lakh crore, according to an ET report.
Why has stock market crashed today:
US Policy Uncertainties:
President Trump’s announcement regarding 25% tariffs on Colombia following their refusal to accept deported migrants created market tension. Although Colombia later agreed to accept migrants without conditions, concerns about potential tariffs on Canada and Mexico from February 1st continue to affect
global markets
.
“A major concern is that President Trump is introducing new threats, like the 25% tariff on Colombia for refusing to accept deported illegal immigrants. The potential tariffs on Canada and Mexico are weighing on the markets,” said Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Federal Reserve Decision:
Investors await Wednesday’s US Federal Reserve rate decision. While rates are expected to remain stable, the accompanying commentary about future rate adjustments is crucial, particularly given President Trump’s advocacy for reduced borrowing costs.
Weak Corporate Performance:
The current earnings season shows limited growth. Bloomberg estimates suggest Nifty50 companies will achieve only 3% year-on-year EPS growth in Q3. While some sectors show promise, others including metals, chemicals, and banking face challenges.
FII Selling Pressure:
Foreign institutional investors continue their selling trend, having sold Rs 64,156 crore worth of equities as of January 24, 2025.
Currency Movements:
Global market uncertainty regarding US tariffs has strengthened the dollar. The dollar index increased by 0.21% to 107.66. However, Nomura strategist Naka Matsuzawa suggests this strength may be temporary, noting, “As a trend, Trump is adopting a more realistic and less aggressive stance on tariffs.”
