Last Updated:
Stock Market Crash:BSE Sensex and Nifty 50, were trading with deep cuts amid mixed global cues following the inauguration of President Donald Trump.
Stock Market Crash
Stock Market Crash Today: Indian benchmark equity index, the Sensex, plunged sharply on Tuesday, dragged down by key stocks like RIL, Kotak Bank, and Zomato, as market sentiment turned cautious following US President Donald Trump’s trade tariff announcement on neighboring countries shortly after taking office.
At Day’s Low, the BSE Sensex was trading 1,300 points, or 1.69%, lower at 75,773. The Nifty50 plunged below the 23,000 mark to 22,977 around 2:44 pm.
At the close, the BSE Sensex plummeted 1,235.08 points, or 1.60%, to finish at 75,838.36. The index fluctuated 1,431.57 points between 75,641.87 and 77,337.36 during the day.
NSE Nifty50 also faced severe pressure, settling at 23,024.65 with a loss of 320.10 points or 1.37 per cent. Nifty50 was seen at the day’s high of 23,426.30, while the day’s low was quoted at 22,976.85.
Adding to the negative sentiment, all sectors turned red, reversing the positive momentum from the previous session’s strong close. Data from exchanges showed that the market capitalization eroded by Rs 8 lakh crore in today’s session.
US stock futures had surged globally after Trump’s inauguration, with optimism over potential economic policies, particularly in banking and energy sectors. However, sentiment soured in Asia as Trump’s 25% tariff proposal on Mexico and Canada dampened expectations of a delay, quashing earlier hopes following his inauguration speech.
While the gradual 25% tariff hikes on Mexico and Canada are expected, the dollar and US 10-year bond yields fell slightly. Analysts suggest that any delays in tariff hikes could benefit emerging markets like India. However, consistent FII inflows remain contingent on a revival of India’s GDP growth and corporate earnings.
Traders view the markets as oversold, but believe the current uptrend might only be a temporary bounce rather than a significant shift. Mixed earnings and continued FII selling are keeping sentiment subdued. Analysts suggest that meaningful recovery will depend on sector-wide signals rather than individual stocks.
In the broader market, mid and small-caps mirrored the weak trend, each losing about 1%. Religare Broking’s Ajit Mishra highlighted that mid and small-cap valuations remain stretched above long-term averages, leaving room for further declines. Investors are advised to take a stock-specific approach and focus on strong businesses.
Why Did Share Market Fall Today?
Trump’s Tariff Threats on BRICS Nations: President Donald Trump’s recent remarks targeting BRICS countries have raised alarms among investors. On Monday, Trump reaffirmed his stance on imposing 100 percent tariffs on nations that reduce their reliance on the US dollar for global trade. In a statement made in the Oval Office, Trump warned, “As a BRICS nation… they’ll face a 100% tariff if they continue their de-dollarization efforts.”
India, a significant member of BRICS, stands out as particularly vulnerable to these potential tariffs. An aggressive approach by Trump could disrupt India’s trade dynamics, adding to broader market concerns. Furthermore, Trump announced plans to impose 25 percent tariffs on imports from Canada and Mexico starting February, further escalating fears of global trade disruptions. Prashant Tapse, Senior Vice President of Research at Mehta Equities, commented, “Trump’s tariff decisions remain a wildcard for Indian markets. The uncertainty surrounding his stance on India has kept investors cautious.”
Weak Q3 Earnings: Market jitters were further exacerbated by mixed corporate earnings. Dixon Technologies saw a 14 percent drop in its share price following a decline in consolidated net profit and revenue for the December quarter. Zomato’s stock also took a hit, falling 9 percent after its Q3 results revealed that Blinkit’s aggressive expansion was impacting profitability.
In the realty sector, Oberoi Realty slipped 7.6 percent after posting results that fell short of market expectations. The disappointing earnings report raised concerns about growth in key sectors, dampening investor sentiment.
Bank of Japan Rate Hike Expectations: Global markets were also rattled by growing expectations of an interest rate hike by the Bank of Japan (BOJ) on Friday. This would mark the first hike since July of the previous year and is seen as a significant move that could affect global borrowing costs. Such a development has added to fears of tightening liquidity, with potential ripple effects on emerging markets like India.
Global Markets: Asian markets were mostly flat after Trump’s tariff remarks on Mexico and Canada, which disappointed investors who had been hopeful of a delay. U.S. stock futures pared earlier gains, with Nasdaq futures down 0.08% and S&P 500 futures up a mere 0.07%. European futures also traded lower, with EUROSTOXX 50 futures falling 0.25% and FTSE futures easing 0.02%.
FII/DII Tracker: Foreign Institutional Investors (FIIs) sold equities worth ₹4,336 crore on January 20, while Domestic Institutional Investors (DIIs) bought equities worth ₹4,322 crore on the same day.
Oil Prices: Oil prices slipped in early Asian trading on Tuesday following Trump’s announcement of plans to boost U.S. oil and gas production. Brent crude futures dropped by 11 cents to $80.04 per barrel, and West Texas Intermediate crude fell 67 cents to $76.72 per barrel.
Rupee vs Dollar: The Indian rupee strengthened by 17 paise to 86.28 against the US dollar, amid fluctuations in the US dollar due to Trump’s tariff announcements. The dollar index fell 0.93% to 108.33.
Technical Outlook: Anand James, Chief Market Strategist at Geojit Financial Services, observed that the market held firm at the 23,140 level, as expected, despite early negativity. However, upward momentum struggled to break through the 23,370/90 barrier. “This remains the critical level to watch, as seen last week. The 23,550-23,640 targets remain in play, but for momentum to sustain, the market must hold above 23,330 early in the day. Otherwise, slippages to 23,268/48 may occur, providing another chance for bulls to regroup.”
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
