Stock market crash today: BSE Sensex and Nifty50, the Indian equity benchmark indices, tanked in trade on Tuesday. While BSE Sensex crashed over 1,300 points, Nifty50 went below 23,000 briefly. BSE Sensex ended the day at 75,838.36, down 1,235 points or 1.60%. Nifty50 closed at 23,045.30, down 299 points or 1.28%.
Major index constituents, including Reliance Industries, ICICI Bank and Zomato, registered substantial losses. The downturn intensified following U.S. President Donald Trump’s announcement of trade tariffs on neighbouring countries after assuming office, which adversely affected investor confidence.
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The collective market value of BSE-listed firms decreased by Rs 7.48 lakh crore, reaching Rs 424.11 lakh crore.
Stock market crash: Why BSE Sensex, Nifty50 tanked today
1) Market Uncertainty Due to Trump’s Trade Policy Stance
Investors remained cautious following U.S. President Donald Trump’s inconsistent position on trade duties, with participants concerned about potential policy alterations. His latest statements about implementing tariffs on neighbouring nations have further disturbed global market sentiment.
Trump’s administration is evaluating a 25% tariff on Mexico and Canada beginning February 1, reducing expectations of postponement despite initial positive reactions to his inauguration address. This ambiguity has triggered worries about inflation, possible U.S. economic overheating, and dollar appreciation, potentially affecting bond markets.
2) Significant Losses in Zomato and Other Major Stocks
Zomato’s shares fell by more than 11% after announcing a 57% year-on-year reduction in its December quarter net profit, contributing 150 points to the Sensex decline. Additional significant contributors to the Sensex’s fall included Reliance, ICICI Bank, SBI, and M&M, collectively accounting for 490 points of the decrease.
3) Earnings
For the third quarter, Nifty50 companies are projected to show merely 3% year-over-year EPS growth, according to Bloomberg consensus estimates. Sectors such as capital goods, healthcare and telecom are anticipated to deliver robust profit growth. However, InCred Equities indicates that metals, chemicals, consumer staples, banks and oil & gas sectors are expected to underperform.
Initial corporate results have been underwhelming, with the reporting companies showing stagnant profit after tax despite 4% revenue growth compared to the previous year.
4) Realty, consumer stocks
The Nifty Consumer Durables index registered a 4% decline, primarily affected by Dixon Technologies and Amber Enterprises. Dixon Technologies shares fell nearly 14% following Q3 results. Jefferies maintained its ‘Underperform’ rating with a target price of Rs 12,600, acknowledging earnings performance whilst cautioning about valuation concerns due to an elevated FY26 P/E of 106x.
The Nifty Realty Index declined by 4.12%, with Oberoi Realty, Lodha, and Prestige Estates Projects leading the downward trend.
5) Foreign Investment Outflow
The market continues to face pressure from sustained foreign institutional investors’ (FIIs) selling. As of January 20, 2025, FIIs have withdrawn Rs 48,023 crore from equities, with no indication of reducing their selling activities.
