Stock market crash today: BSE Sensex and Nifty50, the Indian equity benchmark indices, tanked in trade on Tuesday. While BSE Sensex crashed over 800 points, Nifty50 went below 23,200. At 11:42 AM, BSE Sensex was trading at 76,394.24, down 679 points or 0.88%. Nifty50 was at 23,178.70, down 166 points or 0.71%.
Leading equity indices Sensex and Nifty declined driven by substantial selling pressure in Reliance Industries and Zomato shares. Markets remained cautious following U.S. President Donald Trump’s declaration regarding trade duties on adjacent nations after assuming office, which affected overall market confidence.
The collective market value of BSE-listed firms reduced by Rs 5.21 lakh crore to Rs 426.38 lakh crore, according to an ET report.
Stock market crash: Why are BSE Sensex, Nifty50 falling 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 contribution to the Sensex decline was 170 points, as its shares fell over 11% following the announcement of a 57% year-on-year reduction in December quarter profits. Other significant contributors including Reliance, ICICI Bank, HDFC Bank, and SBI collectively added 311 points to the Sensex’s downward movement.
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 recorded a 3.2% decline, affected by poor performance of Dixon Technologies and Amber Enterprises. Dixon Technologies shares fell by over 13% following third-quarter results. Jefferies maintained its ‘Underperform’ rating with a Rs 12,600 target price, noting that despite better earnings, the risk-reward appears unfavourable given the elevated FY26 P/E of 106x.
The Nifty Realty Index decreased by almost 3%, with Oberoi Realty and Lodha leading the downturn.
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.