Stock Market Sees Biggest Fall Since 1996, Foreign Investors Shift Focus To China
Mumbai (The Uttam Hindu)- Friday's trading session was a loss for the Indian stock market. There was selling all around in the market. At the end of trading, the Sensex was at 73,198 with a fall of 1,414.33 points or 1.90 percent and the Nifty was at 22,124 with a weakness of 420.35 points or 1.86 percent. Friday was recorded as the worst day in five months for both the major indices Sensex and Nifty.
US President Donald Trump's announcement of imposing an additional 10 percent tariff on Chinese products led to a huge decline in markets around the world on Friday. Under this pressure, the BSE Sensex fell by 1,414 points and the NSE Nifty by 420 points. Nifty 50 has faced its longest monthly decline since 1996. The stock market is witnessing the biggest decline in 28 years. In the last 5 months, an amount of Rs 91 lakh crore has been wiped out from the market. On 30 September 2024, the market cap of companies listed on the Bombay Stock Exchange (BSE) was Rs 474 lakh crore, which fell to Rs 384 lakh crore on 28 February. That is, in 5 months, the wealth of investors has decreased by Rs 90 lakh crore.
The midcap index, which is more focused on the domestic market, has now officially entered a bear market. It has fallen more than 20% from its record high of September 24. Poor earnings, high valuations, US tariff concerns and persistent selling have kept the market under pressure. The small-cap index had already entered a bear market on February 14. In February alone, the mid-cap and small-cap indices fell 11% and 13%, respectively, marking their worst monthly decline since the March 2020 sell-off during the Covid-19 pandemic.
The reason for the decline in the market is believed to be the announcement of tariffs by US President Donald Trump, which has raised the risk of tariff war. Analysts believe that the pressure on the indices may remain in the near future. Mahesh Patil, Chief Investment Officer, Aditya Birla Sun Life AMC, said, "Investors will stay away from the market for now and wait for the next one or two months. Strong buying support will not be seen until corporate income and economic growth improve. Vinod Nair, Research Head, Geojit Financial Services, said, "The domestic market witnessed a sharp decline due to weak signals in the global markets. The possibility of US announcement to impose additional tariffs of 25 percent on products imported from Canada and Mexico and 10 percent on products imported from China is increasing uneasiness in the market. ' He also said that discussions of imposing tariffs on the possible European Union have also increased uncertainty. Nair said that now investors are eyeing the domestic GDP data, which can give important indications towards economic recovery and can determine the market movement.
Foreign investors withdrew Rs 3.11 lakh crore from the Indian market in just five months (October 2024-February 2025). Investors have sold this due to weak results of companies in the September and December quarters. Apart from this, expectations of improvement in the Chinese economy attracted investors. Investors are finding the shares of Chinese companies cheaper than the shares of Indian companies.
