This market turmoil led to a staggering loss of nearly Rs 5 lakh crore in investor wealth.
Sensex Market Crash Latest News Today: The Indian stock market faced a major selloff on Tuesday as both benchmark indices—BSE Sensex and NSE Nifty—witnessed significant declines amid growing global and domestic uncertainties. The Sensex plunged 848 points to 76,224.79, while the Nifty dropped 217 points to 23,127.70. The broader BSE Midcap and Smallcap indices also fell sharply, shedding over 2% each.
This market turmoil led to a staggering loss of nearly Rs 5 lakh crore in investor wealth, as the market capitalization of BSE-listed companies dropped from Rs 432 lakh crore to Rs 427 lakh crore.
What Triggered the Market Rout?
Here are the five primary reasons behind today’s market downturn:
1. Concerns Over Trump’s Trade Policies
On his first day as the 47th U.S. President, Donald Trump announced plans to impose tariffs on neighboring countries, including Canada and Mexico, while hinting at potential tariffs on India. These policies have created uncertainty in global markets, with investors fearing adverse impacts on India’s export-driven sectors and IT companies that rely heavily on U.S. markets.
2. Pre-Budget Caution
With the Union Budget 2025 set to be presented on February 1, investors are adopting a wait-and-watch approach. Expectations are high that Finance Minister Nirmala Sitharaman will announce measures to boost rural growth, consumption, and infrastructure development. However, any disappointment in these areas could further dent market sentiment.
3. Foreign Outflows Intensify
Foreign portfolio investors (FPIs) have been consistently pulling out capital from Indian equities amid a strengthening U.S. dollar and rising bond yields. As of January 20, FPIs have offloaded nearly Rs 51,000 crore in equities this month, exacerbating selling pressure.
4. Weak Corporate Earnings
Earnings reports for the December quarter have largely failed to impress investors, with mixed performance across key sectors. After subdued results in the first two quarters, Q3 earnings have done little to lift market sentiment, further fueling concerns about corporate profitability.
5. Macroeconomic Weakness
Lingering concerns over the health of the Indian economy, including slowing industrial growth and elevated inflation, have added to the cautious mood. Weak macroeconomic indicators continue to weigh on investor confidence.
Looking Ahead
Market experts believe the current selloff reflects a combination of global trade uncertainties, foreign capital outflows, and domestic economic challenges. While hopes are pinned on the upcoming Union Budget to revive sentiment, any missteps could deepen the ongoing downturn.
Investors are advised to tread cautiously in the coming weeks, keeping an eye on developments in both global trade policies and domestic economic measures.
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