Due to unfavorable global signals, the Indian stock market suffered a significant decline, with the Sensex plunging more than 700 points and the Nifty 50 plummeting below 23,250. Investors lost almost ₹5 lakh crore in just five minutes.
Stock market crash: The Indian stock market took huge losses in early trade on Monday, February 3, with the Sensex dropping over 700 points and the Nifty 50 sliding below 23,250 on negative global signals.
Sensex opened at X versus a previous closing of 77,505.96 and fell over 700 points to 76,791.09. The Nifty 50 opened at 23,319.35, down from its previous close of 23,482.15, and fell by 1% to 23,246.55.
The selloff was sharp in the mid and small-cap segments as the BSE Midcap and Smallcap indices plunged over one per cent each.
Around 9:20 AM, the Sensex was 671 points, or 0.87 per cent, down at 76,835 and the Nifty 50 was 219 points, or 0.93 per cent, down at 23,263.
The market capitalization of BSE-listed corporations fell to over ₹419 lakh crore from ₹424 lakh crore in the previous session, causing investors to lose approximately ₹5 lakh crore in only 5 minutes.
Why is the Indian stock market falling today?
1. Weak global cues– The Indian stock market responded to poor global cues. Major Asian markets slumped on Monday after US President Donald Trump slapped tariffs on Canada, Mexico, and China, increasing fears of a wider trade war that may harm global economic development. Japan’s Nikkei and Korea’s KOSPI lost 3% each.
“Despite an excellent budget, the market will be under pressure from the Trump tariffs and the heightened global uncertainty that these ‘initial rounds of tariffs’ have triggered,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
2. Trump tariff hits market sentiment: As widely reported by media, US President Donald Trump slapped Canada and Mexico with 25 per cent duties. A 10 per cent levy has also been imposed on imports from America’s biggest trade partner, China. Retaliatory tariffs are underway.
Experts believe Trump’s tariff policy could unleash a tariff war which could derail the global economy.
“It is important to understand that the 25 per cent tariffs imposed on Mexico and Canada are to punish them for issues like immigration and illicit trade in fentanyl. Trump may use tariffs against other countries again on non-trade issues. China’s response to the 10 per cent tariffs has been more responsible. For now, they have not reacted like Mexico and Canada by imposing tariffs on imports from the US. Instead, they are moving the WTO against the US action,” said Vijayakumar.
