Sensex, Nifty plunge for 9th consecutive session
What's the story
India's top stock indices, Nifty 50 and Sensex, remained on a downward spiral for the ninth consecutive session.
At 9:16 am today, Sensex was down nearly 600 points at 75,348, while Nifty was down roughly 200 points at 22,733.
The Nifty Smallcap 100 and Midcap 100 fell over 2% each. BSE Midcap and Smallcap indices fell by over 3% each.
The combined market capitalization of BSE-listed companies fell below ₹400 lakh crore for the first time since June 2024.
Market influencers
Factors contributing to market downturn
The ongoing sell-off in the Indian stock market can be attributed to a number of factors.
Persistent selling by foreign institutional investors, a depreciating rupee, and newly imposed reciprocal tariffs on Indian exports by US President Donald Trump have all contributed to the downturn.
Further, disappointing single-digit PAT growth for the Nifty and BSE500 during the earnings season ending December 31, 2024 has led to further downgrades.
Analyst perspective
Expert insights on market performance
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, blamed high valuations and slowdown in corporate earnings for the market's underperformance.
He said "a modest single-digit earnings growth doesn't deserve high valuations."
He added "only indications of an earnings recovery and declining dollar can reverse the weakening market trend."
Ajit Mishra - SVP, Research, Religare Broking stressed on banking and IT sectors to determine future market direction.
International impact
Global market trends and potential recovery
Despite India's downturn, Wall Street nearly set a new record high on Friday. The S&P 500 stayed flat while the tech-focused Nasdaq Composite climbed 0.4%.
However, disappointing retail sales data from the US has fueled speculation that the Federal Reserve may reconsider its rate trajectory, possibly leading to further dollar weakness.
This could affect global markets including India's.