Business & Economy

“BSE Sensex Plunges Over 1,200 Points; Nifty50 Drops Below 23,050 Due to Trade Policy Uncertainty and Major Stock Losses”

“BSE Sensex Plunges Over 1,200 Points; Nifty50 Drops Below 23,050 Due to Trade Policy Uncertainty and Major Stock Losses”

The Indian stock market witnessed a significant downturn today, with benchmark indices BSE Sensex and Nifty50 experiencing sharp declines. The Sensex plunged over 1,200 points, trading at 75,811.59, reflecting a drop of 1.64%. Similarly, the Nifty50 index slipped below the 23,050 mark, trading at 23,013.30, down by 1.42%. This steep decline has rattled investor sentiment, wiping out Rs 5.21 lakh crore in market value of BSE-listed firms, now standing at Rs 426.38 lakh crore.

A key factor contributing to this market meltdown is growing uncertainty surrounding U.S. trade policies under President Donald Trump. His administration’s announcement of a potential 25% tariff on neighboring countries like Mexico and Canada, starting February 1, has created jitters globally. Investors fear this could lead to inflationary pressures, a stronger dollar, and potential overheating of the U.S. economy, thereby disrupting global trade dynamics and impacting market confidence.

On the domestic front, significant selling in heavyweights such as Reliance Industries and Zomato further dragged down the indices. Zomato’s shares plummeted by over 11% after reporting a 57% year-on-year decline in December quarter profits, shaving off 170 points from the Sensex. Other major players, including ICICI Bank, HDFC Bank, and SBI, contributed significantly to the overall decline, collectively accounting for 311 points.

Corporate earnings have also painted a mixed picture, adding to market concerns. Initial third-quarter results have been underwhelming, with companies showing stagnant profit growth despite a modest 4% rise in revenue year-on-year. Analysts project only a 3% year-over-year growth in earnings per share (EPS) for Nifty50 companies, dampening investor optimism. While sectors like capital goods, healthcare, and telecom are expected to perform well, metals, chemicals, consumer staples, banks, and oil & gas sectors are likely to lag.

Consumer and real estate stocks were hit hard, with the Nifty Consumer Durables index falling 3.2%. Dixon Technologies witnessed a sharp decline of over 13% after posting its quarterly results, with analysts citing unfavorable risk-reward metrics despite improved earnings. Realty stocks also took a hit, with Oberoi Realty and Lodha leading the losses, dragging down the Nifty Realty Index by nearly 3%.

Another significant factor weighing on the market is the persistent selling by foreign institutional investors (FIIs). As of January 20, 2025, FIIs have pulled out Rs 48,023 crore from Indian equities, adding to the bearish sentiment. The sustained outflow underscores concerns over global economic uncertainties and local market underperformance.

Today’s market crash underscores the fragile sentiment among investors as they navigate domestic and international challenges. The combination of global trade policy concerns, underwhelming corporate earnings, and persistent FII outflows has created a perfect storm, leaving traders and investors cautious about the near-term market trajectory. Stay updated with the latest developments to make informed decisions during these volatile times.

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