Sensex tanks 770 points: What's behind today's stock market crash?
What's the story
India's leading stock market indices, Sensex and Nifty, opened in red today due to continuous FII selling and global uncertainties over US tariffs.
At the time of writing, Sensex was down by 774 points to trade at 74,536, while Nifty had declined by 241 points to 22,554.
The Indian benchmark indexes followed a worldwide market slump after US equities fell over fears of weakening consumer demand and tariff threats.
Market impact
US consumer sentiment hits 15-month low
US consumer sentiment fell to a 15-month low in February, while inflation expectations soared on President Donald Trump's proposed tariffs. This has heightened investor concerns.
Most Asian markets mirrored Wall Street's losses amid rising economic uncertainty.
Out of the 30 Sensex shares, 28 were in red with Zomato, HCL Tech, PowerGrid, HDFC Bank and IndusInd Bank falling up to 2%.
Expert opinion
Market strategist comments on FII selling and global uncertainties
Commenting on the market situation, V K Vijayakumar, chief investment strategist at Geojit Financial Services, said, "The market is facing headwinds from relentless FII selling and global uncertainties relating to Trump tariffs."
He added the sharp surge in Chinese stocks is another near-term headwind.
The 'Sell India, Buy China' trade may continue for some time since Chinese stocks continue to be attractive.
Economic challenges
Stagflation in US economy poses challenges for India's export-driven sectors
Stagflation—slowing growth and rising prices—in the world's largest economy is a worrying sign for India's export-driven sectors, especially IT.
It also makes India and other emerging markets less appealing to foreign investors, who may turn to safer assets like the dollar, gold, and US treasuries.
So far in February, FIIs have net sold Indian equities worth ₹36,977 crore while domestic institutional investors (DIIs) have stepped in, net buying shares worth ₹42,601 crore.
Market performance
Broader markets underperform, BSE midcap and smallcap slide
Broader markets lagged with the BSE Midcap declining 1.6% and BSE Smallcap slipping over 2%.
Excluding Nifty Pharma and Nifty Healthcare, all 11 other sectoral indices were in red. Nifty IT was the worst hit, slipping over 2%, dragged by heavyweights Infosys and TCS.
Last week, Sensex and Nifty struggled under selling pressure especially in auto and financial stocks due to concerns over Trump's tariffs, persistent US inflation, Fed's cautious stance on rate cuts.