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Stock Market Crash Today (28, Feb, 2025): Markets faced a sharp decline weighed down by the impact of Trump’s tariffs, continued FII selling, and weak global cues.
Stock Market Crash: Sensex and Nifty Plunge – Reasons Behind the Market Fall
Sensex Today: Benchmark indices ended sharply lower on Friday, with the BSE Sensex plunging over 1,400 points and the Nifty50 dropping below 22,150, as broad-based selling took hold ahead of key GDP data and amid fresh concerns over U.S. President Donald Trump’s tariff remarks and a slowing U.S. economy.
By close, the Sensex had plunged 1,414 points, or 1.9 percent, to 73,192, while the Nifty shed 418 points, or 1.9 percent, to 22,126. On the NSE, the breadth of the market painted a starkly negative picture, with just 400 stocks advancing against a staggering 2,221 declining. The benchmarks closed lower for their fifth straight month—the longest losing streak in 29 years. A combination of concerns over slowing economic growth, fading earnings momentum, Trump’s trade policies, and relentless selling by foreign investors has dragged the benchmarks down 18 percent from their record highs in late September.
The total market capitalization of all BSE-listed companies declined by Rs 8.9 lakh crore, falling to Rs 384.22 lakh crore.
Why Is Indian Share Market Falling Today?
Concerns Ahead of GDP Data Release
Fears of slowing economic growth, weakening earnings, Trump’s tariff policies, and ongoing foreign investor selling have caused the benchmarks to fall 14% from their record highs in late September.
In light of these concerns, investors are closely monitoring the release of the December quarter GDP data, set to be published after market hours on Friday. A Reuters poll of economists suggests that India’s economy likely showed a rebound during the quarter.
Uncertainty Surrounding Trump’s Tariff Policies
On Thursday, Trump announced that the 25% tariffs on imports from Canada and Mexico would take effect on March 4, ahead of the previously stated April 2 timeline. He also imposed a 10% tariff on Chinese goods and reiterated his commitment to 25% tariffs on goods from the European Union. This unpredictability surrounding trade policies has added to market volatility.
DIIs Reluctant to Act at Elevated Levels
Avinash Gorakshkar of Profitmart Securities noted that while FIIs continue to sell in the Indian markets, DIIs have been hesitant to step in as they have in the past. A key reason for this reluctance is that DIIs are stuck at higher levels and are unwilling to reposition until they gain more clarity on market trends.
MSCI Rejig Impact
Anshul Jain, Head of Research at Lakshmishree Investment and Securities, highlighted that the upcoming MSCI rejig is contributing to the market downturn. The rejig is expected to impact trade volumes, as well as the inflow and outflow of funds into specific stocks. As a result, both DIIs and FIIs are expected to rebalance their positions ahead of this change.
Pressure on IT Stocks
Most Asian markets experienced declines on Friday, with the MSCI Asia ex-Japan index falling by 1.21%, reflecting losses on Wall Street, particularly after a sharp drop in chipmaker Nvidia’s stock. Technology stocks were further pressured as investors reacted to Nvidia’s earnings report, leading to a sell-off in AI-driven stocks, including other “Magnificent Seven” mega-cap companies. The Nifty IT index fell by 3.2%, with Persistent Systems, Tech Mahindra, and Mphasis among the biggest losers, dropping as much as 4.5%.
Rising Dollar Index
The US dollar remained near multi-week highs against major currencies, as growing trade war concerns dampened investor sentiment. On Friday, the US dollar index, which tracks the greenback against six major peers, rose to 107.35. A stronger dollar typically has a negative impact on emerging markets like India, as it increases the cost of foreign investments and leads to capital outflows from equities.
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