Investors lose over Rs 5 lakh crore as Sensex sinks 600 pts; key factors behind today's slump
[hfe_template id='11223']
[ad_1]
As of 9:20 am, the BSE Sensex had dropped 604 points, or 0.74%, to 81,668, while the Nifty50 was down 183 points, or 0.73%, at 24,668.
The total market capitalisation of BSE-listed companies declined by Rs 5.5 lakh crore to Rs 453.35 lakh crore.
On the sectoral front, Nifty Auto slipped 1%, while banking, metal, pharma, and realty indices were also trading in the red.
Factors behind the market decline:
1) Trump threatens 25% tariff, penalty
The proposed 25% tariff would disproportionately impact India compared to other major trading partners and could derail months of diplomatic and trade negotiations between the two countries.Analysts believe sectors such as textiles, pharmaceuticals, and auto components—key Indian exports to the U.S.—are likely to be hit the hardest if the tariffs are implemented.In addition to the proposed tariffs, Trump said the U.S. would impose further penalties on India, citing trade imbalances and India’s alignment with the BRICS bloc, which he described as unfriendly toward American interests.
2) Fed dampens rate cut hopes
Investor sentiment was also weighed down by the U.S. Federal Reserve’s decision to keep interest rates unchanged for the fifth straight meeting. While the move was expected, Fed Chair Jerome Powell’s remarks signaled uncertainty over a rate cut in September, stating it was too soon to make that call.
The Fed’s stance, while modestly restrictive, is seen as not yet slowing the economy, further delaying hopes of policy easing.
3) Rise in Crude Oil Prices
Oil prices steadied on Thursday as investors weighed the risk of supply disruptions amid U.S. President Donald Trump's tariff threats linked to the Ukraine conflict. However, a surprise build in U.S. crude inventories capped gains.
Brent crude hovered near $73 a barrel, while WTI traded just below $70. Both benchmarks had risen 1% in the previous session, but ongoing geopolitical tensions and mixed inventory data kept traders cautious.
4) Continued FII selling adds pressure
Foreign institutional investors (FIIs) have been persistent net sellers, pulling out nearly Rs 25,000 crore from Indian equities over the past eight trading sessions.
Analysts say US President Donald Trump’s proposed 25% tariff on Indian imports may further dampen FII sentiment. According to Nuvama, sectors such as pharmaceuticals, auto ancillaries, select industrials, cables and wires, and tiles—where the U.S. sets the marginal price—could be the most affected.
MORE TO COME...
Comments
Post a Comment