FALLING for the fifth day in a row on Monday, equity benchmark BSE Sensex tumbled over 1 per cent to drop below the crucial 75,000 level, tracking a US market trend and unabated foreign fund outflows amid concerns over US tariffs.
The 30-share BSE benchmark tanked 856.65 points or 1.14 per cent to settle at 74,454.41. During the day, it plummeted 923.62 points or 1.22 per cent to 74,387.44. The NSE Nifty dropped 242.55 points or 1.06 per cent to 22,553.35.
In the last five trading sessions, the BSE barometer lost 1,542.45 points or 2 per cent, and the Nifty tanked 406.15 points or 1.76 per cent.
Investor sentiment remained weak as widespread selling was seen across various sectors.
The overall market capitalisation of companies listed on the Bombay Stock Exchange saw a sharp decline, with investors losing nearly ₹4 lakh crore in a single session. Midcap and small-cap stocks were also affected, with indices in both categories witnessing notable declines.
Sectoral Performance Reflects Market Uncertainty
The stock market decline impacted most major sectors, with information technology, metals, and oil and gas stocks being hit the hardest.
The Nifty IT index fell by nearly 2.7 percent, while metal and oil and gas stocks also recorded losses of over 2 percent. Banking stocks experienced moderate declines, with the Nifty Bank index slipping by 0.67 percent.
However, a few sectors managed to withstand the market downturn. The FMCG sector saw slight gains, rising by 0.36 percent, while the auto sector managed to climb by 0.22 percent.
Pharma stocks remained largely stable, reflecting some resilience in specific industries despite the overall weak market sentiment.
Key Factors Driving the Stock Market Selloff
Multiple factors contributed to the sharp decline in the Indian stock market. Global concerns, particularly related to the United States and its trade policies, played a major role in weakening investor sentiment.
Uncertainty surrounding a possible trade war has been growing, with worries about new tariff policies introduced by the US administration. Investors fear that escalating trade tensions could slow global economic growth, affecting exports and industrial production worldwide.
The Indian stock market has also been impacted by heavy selling by foreign portfolio investors. Since October, foreign investors have been reducing their holdings in Indian equities, citing concerns over high valuations, global uncertainties, and rising bond yields in the United States.
Data indicates that in February alone, foreign investors sold nearly ₹37,000 crore worth of Indian stocks, adding to the market pressure.
Rising Competition from China and Global Economic Trends
Another factor influencing investor sentiment is the recent surge in the Chinese stock market. With the Chinese government introducing multiple measures to support its economy, global investors have been shifting their focus toward Chinese stocks.
This shift has led to a reallocation of funds away from India, adding to the market’s challenges.
India is also facing concerns about a potential economic slowdown. While the country has been one of the fastest-growing major economies, recent macroeconomic indicators suggest a moderation in growth.
Analysts predict that India’s GDP growth rate could slow down in the coming year due to weaker global demand and external economic pressures.
In addition to domestic factors, developments in the United States are also influencing market sentiment. Inflation in the US remains a concern, with recent data showing price increases that could delay expected interest rate cuts by the US Federal Reserve.
The uncertainty surrounding the Federal Reserve’s policy decisions has contributed to nervousness in global markets, including India.
Market Experts Express Caution
Financial experts believe that the current uncertainty in global markets is likely to persist in the near term. While some analysts suggest that foreign selling may ease if US interest rates stabilise, others caution that external risks could continue to pressure Indian equities.
