Bears took control of the stock market as Dalal Street bled on Monday, extending its losses into 2025. Sensex and Nifty fel over 1%, resulting in a loss of nearly Rs 10 lakh crore for stock market investors.
The S&P BSE Sensex fell by 677.78 points to 75,512.78, while the NSE Nifty50 was down 217.45 points to 22,874.75 as of 12:42 AM.
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Investors on Dalal Street faced losses as stock markets continued to decline, bringing the market capitalisation of all listed companies on the Bombay Stock Exchange (BSE) down by Rs 9.48 lakh crore, settling at Rs 410.03 lakh crore.
Experts attributed the sstock market crash to a mix of factors, including weak market sentiment, global uncertainty, and selling pressure from foreign portfolio investors (FPIs). Persistent FPI outflows and profit bookings have added to the volatility, with concerns about key upcoming events weighing on investor confidence.
WHAT NEXT FOR DALAL STREET?
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented, “This 6-day week is likely to be highly volatile with other major events like the Fed decision and the Budget in India. The market is looking forward to fiscal stimulus through income tax cuts in the Budget. If the expectations are met, there can be a relief rally in the market. But if a rally is to sustain, we need data indicating growth and earnings revival.”
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The weak sentiment has been compounded by sustained FPI selling. FPIs have pulled out Rs 69,000 crore from Indian markets in January so far, further contributing to the downward pressure. Although domestic institutional investors (DIIs) have bought shares worth Rs 67,000 crore during the same period, their efforts have not been enough to counterbalance the losses.
GLOBAL CUES RAISE CONCERN
Global uncertainties have also played a significant role in dampening investor sentiment. Trivesh, COO of Tradejini, said, “Markets today have declined due to a mix of global and domestic concerns. The market appears to be nervous about the impact of tightening on global liquidity, as the US Federal Reserve is set to announce its next monetary policy decision.”
Adding to these worries are trade tensions and geopolitical risks. “The rise of China’s DeepSeek AI has raised alarms about the growing competition in the global technology race. Moreover, there is an additional burden of global uncertainty as trade tensions have risen due to tariffs on Colombia,” Trivesh added.
The prospect of new tariffs by the United States is another area of concern. President Trump has reportedly threatened a 25% tariff on Colombia for refusing to take back deported illegal immigrants. Similar tariffs on Canada and Mexico are expected to come into effect from February 1, raising questions about the broader implications of these policies on global trade and economic stability.
The prices of crude oil have remained under pressure, reflecting concerns about slowing demand as global growth tapers off. This has added to the challenges for Indian markets, as the country is a major importer of crude oil.
Meanwhile, quarterly corporate earnings have been another source of disappointment, failing to provide any relief to the markets. Persistent FII outflows, combined with global risk aversion, have triggered capital flight, adding to the pressure on domestic equities.
Domestic investors are also closely watching the Union Budget, which will be presented soon. Market participants are hoping for fiscal stimulus measures, including income tax cuts, to support growth and boost investor sentiment. However, uncertainty around the budget has heightened market volatility, with many investors adopting a cautious stance.
Kranthi Bathini, Equity Strategist at WealthMills Securities, said, “Nifty is trading below the crucial 23,000 level. Anything below this creates panic and leads to furious selling. Today, we are witnessing visible pressure in mid-cap and small-cap stocks. Investors are also being cautious due to the upcoming Union Budget and the Reserve Bank of India’s monetary policy decision next week.”
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