Mumbai
There was a huge fall in the Indian stock market on Tuesday 21 January. Both Sensex and Nifty fell more than 1%. About half an hour before the close of trading, the Sensex took a dive of 1227 points and slipped to the level of 75,845, while the Nifty fell by 332 points and was at the level of 23,012. During this period, investors suffered a loss of about Rs 5 lakh crore.
At the end of trading, Sensex fell by 1235 points to 75,838 and Nifty fell by 320 points to close at 23,024.
These 10 shares fell the most
- Shares of Dixon Tech fell 14 percent and closed at Rs 15,144.
- Kalyan Jewelers shares saw a decline of 8 percent and closed at Rs 488.
- Shares of Oberoi Realty fell 7.23 percent and closed at Rs 1858.
- Kaynes Tech shares fell 9.61 percent and closed at Rs 5977.
- Talking about MCX shares, they fell by 8.66 percent and closed at Rs 5504.
- Amber Enterprises stock fell by 7.58 percent and closed at Rs 6515.
- Among largecap stocks, Zomato shares fell 10.51 percent, Trent shares fell 5.80 percent, Jio Financial Services fell 5.66 percent and Shares of Marcotech Dev Tech fell 5 percent.
The market fell due to these five reasons
Trump’s statement on tariff increase
The Indian stock market also appeared frightened by US President Donald Trump’s increase in tariff charges. Investors appeared cautious due to concerns about policy changes. Trump’s administration is considering imposing 25% tariffs on Mexico and Canada starting Feb. 1, reducing expectations for a delay after initial optimism from his inaugural address.
Decline in Zomato and other giants
Zomato alone contributed 170 points to the Sensex fall, with its shares falling over 11% after reporting a 57% year-on-year decline in December quarter net profit. Reliance, ICICI Bank, HDFC Banks and other biggies like SBI jointly contributed 311 points to the overall Sensex fall.
decline in earnings
Even in the December quarter, the results of many companies are not looking very good. There is good growth in sectors like metal and healthcare. But the possibility of decline in metal, chemical, consumer, bank and others is increasing.
Consumer durables and realty stocks fall
The Nifty Consumer Durables index, which includes Dixon Technologies and Amber Enterprises, fell 3.2%. Dixon Technologies shares fell more than 13% after third-quarter results, with Jefferies giving it an ‘underperform’ rating.
selling is not stopping
There is pressure on the market due to continuous selling by foreign institutional investors (FIIs). By January 20, 2025, FIIs have sold shares worth Rs 48,023 crore, showing no signs of their selling spree slowing down.
Trump threatens to impose tariffs on BRICS countries
Donald Trump’s statement targeting BRICS countries has created panic among investors. BRICS countries include India along with Brazil, China, Russia and South Africa. As soon as Trump took charge of the presidency on Monday, he made it clear that he intends to impose 100 percent tariffs on countries that are reducing their dependence on the US dollar in international trade. Speaking at the White House, he warned, “If any BRICS country… thinks about dedollarization, that is, continuing to try to reduce its dependence on the dollar, it will face 100% tariffs.”
Being a key member of BRICS, such a situation can have a significant impact on India. This aggressive stance of the US President can impact India’s trade equations and create widespread concern in the market. Apart from this, Trump also announced a plan to impose 25 percent tariff on goods coming from Canada and Mexico from February, which has increased the possibility of more disruptions in international trade. Prashant, Senior Vice President (Research), Mehta Equities Taapsee said, ‘Trump’s tariff related decisions are the main reason for the decline in Indian markets. Uncertainty over his stance on India has forced investors to adopt a cautious approach.
weak quarterly results
The mixed quarterly results of companies in the December quarter have further increased the concern in the market. Shares of Dixon Technologies fell more than 14 percent today. During the December quarter, both the company’s consolidated net profit and revenue registered a quarterly decline. Zomato shares also crashed by 9 percent as soon as the market opened today. Zomato has been aggressively expanding its quick commerce platform Blinkit, which has impacted its December quarter profit. In the real estate sector too, shares of Oberoi Realty fell 7.6 per cent as its results fell short of market expectations. Due to these disappointing results, questions have been raised on the growth prospects of many major sectors, which has weakened investor sentiment.
Interest rates expected to rise in Japan
There was uneasiness in the global markets today due to the possibility of increasing interest rates by the Bank of Japan (BOJ). If this increase happens, it will be the first increase since July last year. This increase is being considered an important step, which can affect the cost of borrowing globally. This has further increased concerns about lack of liquidity and its possible impact on emerging markets like India.
Continuous selling by foreign investors
Foreign institutional investors (FIIs) have made it necessary to withdraw money from the Indian market. On Monday, January 20, he sold shares worth a net Rs 4,336.54 crore. So far in the month of January, foreign investors have sold about Rs 50,912.60 crore, due to which there is pressure on the market.
Uncertainty regarding the upcoming budget
Apart from this, due to the upcoming Budget 2025, an atmosphere of uncertainty is being seen and investors are seen in a ‘watch and wait’ mood before the budget announcements. Chit Jain, vice-president, Motilal Oswal Financial Services, said, ‘India VIX index jumped over 5% today, reflecting growing uncertainty in the market ahead of the Union Budget. FIIs also remain sellers in the Indian market and have sold shares worth more than Rs 50,000 crore this month. This is the main reason for the decline seen in the market.
