Indian Market in Freefall: Why Indian Market is Falling The Shocking Truth Behind the Crash
Indian Market in Freefall: Why Indian Market is Falling
Indian benchmark indices Nifty 50 (NSE) and Sensex (BSE) fell almost by 1% on 12th February 2025.
In wider view the markets lagged behind the benchmarks, as both the BSE Midcap and BSE Smallcap indices experienced declines of 2-3 percent. These indices have now entered bear market territory, having dropped 20 percent from their peak levels.
The Indian market is falling for sixth consecutive trading session amidst the fear in the global market regarding the U.S. Tariff.
The total estimated loss in Indian market is around 24 Lakh Crore while today alone investors saw a loss of 7 lakh crore which is expanding fears across the Indian investors.
Today Nifty 50 opened at 23050 and fell to 22798 till 10:15 AM which is more than 1%, while Sensex today opens at 76188 and fell to 75388 (800 points).
2829 shares were declined, 86 shares were unchanged and only about 450+ shares advanced.
The Midcap index slips more than 18% from its all time high in September 2024. Nifty Small cap fell more than 20% from its all-time high.
On February 11 during a Senate Banking Committee hearing U.S. Federal Reserve Chair Jerome Powell has indicated that there is no need to lower the short-term interest rates considering the current situation. He references a “Strong Overall” economy by low unemployment and inflation rates that remain above the Fed’s 2% target.
Vice President of Motilal Oswal Ruchit Jain asserts that the market has been already accounted for this position. He further notes that The Federal Reserve’s strategy is reliant on data particularly given the uncertainties surrounding the tariffs which may lead to increased inflation.
Investors are currently waiting for the release of India’s inflation data, which is scheduled to be announced after the market closes. A Reuters poll suggests that consumer inflation is projected to decline significantly to a five-month low of 4.6 percent in January, attributed to a slowdown in food price increases. A decrease in inflation may offer the Reserve Bank of India the opportunity to respond to the deceleration in economic growth that has impacted corporate profits and consumer spending.
In the last trading session, both Sensex and Nifty 50 experienced a decline of 1.5 percent, marking their fifth consecutive day in negative territory. This downturn was influenced by a combination of global and domestic challenges, including Donald Trump’s recent tariff announcement, a depreciating rupee, disappointing Q3 earnings, and ongoing foreign institutional investor outflows, which collectively led to widespread selling on February 11.
The Indian market has been under tremendous pressure recently, with mid-cap and small-cap stocks facing significant selling. If you look at the near term, the market is more likely to persist the negative momentum. Any small pullback will likely to be sold, Jain said.
As per his views he does not except a significant sell-off in large cap, however as per his view the mid-cap and small-cap segments will continue to see the underperformance in these sectors. “Once the quarterly results are out and the fiscal season wraps up, we’ll get a clearer picture of which stocks have performed well, and those may start to bottom out,” he concluded.
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