Stock Market Crash: Sensex, Nifty Tank Over 950 Points Amid US Tariff Shock & GDP Jitters!

The Indian stock market saw a sharp decline, with the Sensex dropping over 1,000 points and Nifty50 falling below 22,250. Investors are cautious ahead of India’s GDP data, while US tariff hikes under Donald Trump have added to global uncertainty. The IT sector faced heavy losses due to a sell-off in AI-related stocks after Nvidia’s earnings. A strengthening US dollar led to capital outflows from emerging markets like India. Mid and small-cap stocks were hit hard, with investors shifting towards large-cap and defensive sectors. Amid volatility, investors are turning to gold, silver, fixed deposits, and bonds for stability.

Stock Market Crash: Sensex, Nifty Tank Over 950 Points Amid US Tariff Shock & GDP Jitters!

The Indian stock market witnessed a sharp decline on Friday, with the BSE Sensex and Nifty50 suffering significant losses. The Sensex dropped below 73,600, while the Nifty50 slipped under 22,250. As of 10:01 AM, the Sensex was down by 1,015 points (1.36%) at 73,597.70, while the Nifty50 declined 317 points (1.41%) to 22,227.90.

Key Factors Driving the Market Decline

1. Concerns Over GDP Data

Investors are on edge ahead of India’s December quarter GDP figures, set to be released after market hours on Friday. While a Reuters poll indicates potential economic improvement, fears surrounding slowing earnings growth and continuous foreign investor outflows have contributed to a 14% drop in benchmark indices since their September peak.

2. Uncertainty in US Trade Policies

Market sentiment took a hit following recent tariff announcements by former US President Donald Trump. His decision to advance the implementation of a 25% tariff on Canadian and Mexican imports to March 4 (earlier scheduled for April 2), alongside a 10% duty on Chinese goods and sustained 25% tariffs on EU shipments, has heightened global economic concerns.

3. IT Sector Under Pressure

Technology stocks experienced significant losses following a weak performance in US markets. Nvidia’s earnings report led to a sell-off in AI-related stocks, impacting the Indian IT sector. The Nifty IT index dropped 3.2%, with companies like Persistent Systems, Tech Mahindra, and Mphasis witnessing losses of up to 4.5%.

4. Strengthening US Dollar & Global Economic Impact

The US Dollar Index climbed to 107.35, hitting multi-week highs. A stronger dollar leads to capital outflows from emerging markets like India, making foreign investments costlier.

Additionally, inflation concerns in Japan have dampened investor confidence. Tokyo’s core consumer price index rose by 2.2% in February, staying above the Bank of Japan’s 2% target, raising concerns over potential rate hikes.

Broad Market Sell-Off: Mid & Small-Cap Stocks Hit Hard

The market downturn also affected mid and small-cap stocks, with the BSE Smallcap Index declining by 1.93% and the BSE Midcap Index falling 1.94%. Investors have been moving away from riskier assets due to concerns over high valuations, liquidity tightening, and global uncertainties. Sectors such as IT, banking, and consumer durables faced heavy selling pressure.

Analysts note that institutional investors and mutual funds have been rebalancing their portfolios, shifting towards large-cap stocks and defensive sectors like FMCG and healthcare, which are traditionally more stable during market downturns.

Investor Strategy Amid Market Volatility

Amid the prevailing uncertainty, investors are turning to safer asset classes such as gold, silver, fixed deposits, and bonds to manage risks.

• Gold & Silver: These precious metals have historically served as safe-haven assets, with demand increasing during economic volatility, thereby driving up prices.
• Fixed Deposits (FDs): FDs offer a secure investment option with guaranteed returns, making them appealing in uncertain market conditions.
• Bonds: Government and corporate bonds provide stability and predictable income, attracting risk-averse investors.

Given the ongoing market turbulence fueled by geopolitical tensions, trade uncertainties, and economic data concerns, diversification into these safer asset classes can help protect portfolios from further losses.