Stock Market Update: Sensex & Nifty Open Deep in Red
The Indian stock market witnessed a sharp sell-off on Friday, with the Sensex plunging 790.87 points to 73,821.56, while the Nifty tumbled 231.15 points to 22,313.90 at the opening bell. The downward spiral intensified as Sensex sank over 1,000 points, and Nifty slumped nearly 300 points within an hour of trading. By 9:50 AM, the Sensex was 940.77 points (1.26%) lower, trading at 73,703.80, whereas the Nifty was down 272.96 points (1.21%), reaching 22,272.10.
The six-month decline in the markets has been significant, with Sensex dropping approximately 8,897.66 points (10.78%) and Nifty falling 3,026.85 points (11.97%). The ongoing market correction has left investors worried about the right strategy to adopt amid the current turbulence.
Widespread Sell-Off Across Sensex & Nifty Stocks
The majority of Sensex-listed companies were trading in red, led by:
- IndusInd Bank
- Mahindra & Mahindra
- Tech Mahindra
- HCL Technologies
- Infosys
- Tata Steel
- Tata Motors
- Maruti Suzuki
However, Reliance Industries and HDFC Bank managed to stay in positive territory, providing some relief.
Meanwhile, Brent crude oil prices dropped 0.47%, trading at $73.69 per barrel. Additionally, Foreign Institutional Investors (FIIs) sold shares worth ₹556.56 crore on Thursday, further pressuring the market.
Global Markets Plunge Following Wall Street Sell-Off
The global markets are also under pressure, with Asian stock markets tumbling after a massive drop on Wall Street due to uncertainties surrounding Artificial Intelligence (AI) investments. The decline was further fueled by former US President Donald Trump’s trade tariff policies, which include:
- A 25% import tariff on Mexican and Canadian goods.
- Doubling tariffs on Chinese imports to 20%.
The resulting uncertainty has triggered panic selling across financial markets worldwide.
Key Global Indices Performance:
- Japan’s Nikkei 225 fell 3.4% to 36,939.89.
- Hong Kong’s Hang Seng Index dropped 2.3% to 23,175.49.
- Shanghai Composite Index declined 0.9% to 3,358.28.
- South Korea’s KOSPI slumped 3.2% to 2,538.07.
- Australia’s S&P/ASX 200 dropped 1.1% to 8,174.10.
- US Markets:
- S&P 500 declined 1.6% to 5,861.57.
- Dow Jones Industrial Average slipped 0.4% to 43,239.50.
- Nasdaq Composite plunged 2.8% to 18,544.42.
Rupee Weakens Against the US Dollar
The Indian Rupee opened 19 paise lower on Friday, reaching ₹87.37 per US dollar, driven by:
- The strong US dollar rally.
- Weak domestic equity markets.
- Heightened trade tariff uncertainties.
On Thursday, the Rupee closed at ₹87.18 per US dollar. Meanwhile, the US Dollar Index (DXY), which measures the greenback against six major currencies, was up 0.10% at 107.35.
Why Are Markets Falling?
Several factors are contributing to the ongoing stock market decline:
- Global Economic Uncertainty:
- The US Federal Reserve’s hawkish stance on interest rates has fueled concerns about a potential economic slowdown.
- Rising geopolitical tensions have dampened investor sentiment.
- Foreign Institutional Investor (FII) Selling Pressure:
- Continuous FII outflows have significantly impacted stock market stability.
- Institutional investors are moving capital to safer assets amid global market uncertainty.
- Weak Corporate Earnings:
- Several large-cap companies have reported lower-than-expected earnings.
- The technology and financial sectors have faced profitability concerns.
- Rising Inflation & Interest Rate Concerns:
- Inflation remains a persistent challenge in key global economies.
- Higher borrowing costs have discouraged corporate investments and expansion.
What Should Investors Do Now?
1. Avoid Panic Selling
It is crucial for investors to stay calm and avoid panic-driven decisions. Market corrections are natural cycles, and long-term investments often recover.
2. Diversify Your Portfolio
- Allocate investments across multiple asset classes.
- Consider adding gold, bonds, and international equities for balance.
3. Focus on Fundamentally Strong Stocks
Invest in companies with strong earnings growth, robust cash flows, and healthy balance sheets. Blue-chip stocks tend to withstand market fluctuations better.
4. Use Market Dips as Buying Opportunities
Corrections often present good entry points for high-quality stocks. Investors should gradually accumulate stocks during downturns.
5. Keep a Long-Term Perspective
Historically, markets bounce back over time. Long-term investors should remain patient and avoid short-term speculative trading.
