Vikrant Shekhawat : Jan 21, 2025, 05:13 PM
Share Market Crash: The stock market witnessed unprecedented volatility following Donald Trump’s assumption of the U.S. presidency, with losses exceeding ₹8.30 lakh crore for investors in just one trading session. The Sensex plummeted below the 75,000 mark, while the Nifty dipped below 23,000. This sharp decline can be attributed to Trump's new policies and the ensuing global economic instability.
Foreign Investor Sell-Off and Sector-Specific Declines
One of the major reasons for the market crash was the relentless sell-off by foreign institutional investors (FIIs). Additionally, significant losses in consumer durables and real estate sectors further weakened the market. Poor third-quarter results and steep declines in heavyweight stocks like Zomato, Reliance, and ICICI Bank intensified investor concerns.Performance of Sensex and Nifty
Sensex Highlights:
- The Sensex recorded a massive drop of 1,431.57 points, hitting a low of 75,641.87 during the session.
- It opened on a positive note at 77,261.72 but experienced consistent losses, closing at 75,838.36, down 1.60% (1,235.08 points).
Nifty Highlights:
- Nifty saw a sharp decline of 320.10 points, closing at 23,024.65.
- During the session, it fell to a low of 22,976.85, despite opening at 23,421.65.
Major Stock Movements
Significant Declines:
- Zomato: Over 10% drop, contributing to a 150-point loss in the Sensex.
- Reliance, ICICI Bank, SBI: Combined, they pulled the Sensex down by 490 points.
- Trent (Tata Group): Declined 6%.
- NTPC, Adani Ports: Fell by more than 3%.
Notable Gainers:
- Apollo Hospitals: Rose 2.13%.
- BPCL, Tata Consumer: Gained over 1%.
Key Reasons Behind the Market Crash
Trump’s Policies and Global Repercussions:
- Donald Trump’s decision to raise trade tariffs heightened market instability.
- His proposal to impose a 25% tariff on Mexico and Canada created global economic uncertainty.
Zomato’s Weak Quarterly Report:
- Zomato’s net profit dropped by 57%, leading to an 11% fall in its stock.
Poor Earnings Results:
- The Nifty 50 companies’ EPS grew by only 3% year-on-year in Q3, reflecting a weak earnings season.
Heavy FII Sell-Off:
- In January 2025 alone, FIIs offloaded equities worth ₹48,023 crore, exerting pressure on the market.
Massive Losses for Investors
The market downturn significantly impacted the Bombay Stock Exchange (BSE) market capitalization:- On Monday, the BSE market cap fell from ₹4,31,59,726.15 crore to ₹4,23,28,860.11 crore, resulting in an overall loss of ₹8.30 lakh crore for investors.
Market Performance Over Four Months
In the past four months, the market has seen a cumulative decline of 12%:- Sensex: From its record high of 85,978.25, it dropped by 11.79% to 75,838.36.
- Nifty: From its peak of 26,277.35, it slid 12.38% to 23,024.65.