Sensex crashes 3,150 pts, Nifty below 21,900: Why stock market is falling today

Sensex and Nifty on Monday saw one of the worst falls for the two benchmark indices in history in what is being termed as 'Black Monday', as Asian market bled up to 10 per cent, taking note from the Wall Street carnage. This is after recession fears mounted in the US following the Chinese retaliation to tariffs imposed by the Trump administration. 
At 9.20 am, the BSE Sensex fell 3,158.66 points, or 4.19 per cent, to 72,206.03. It hit a low of 71,425.01 in early trade, 3,939.68. Nifty stood at 21,893.50, down 1,010.95 points or 4.41 per cent. This index briefly fell below 21,750. Tata Steel, Infosys, Tata Motors, HCL Tech and TechM led the fall at Sensex, plunging up to 10 per cent.

The BSE Sensex had fallen 4,389.73 points on June 4, 2024, following the Lok Sabha elections. It had fallen 3,934.72 points on March 23, 2020, due to nationwide lockdown on account of Covid 19. Earlier on March 12, 2020, also 2,919.26 points due to Coronavirus concerns. 

The fresh round of tit-for-tat between China and the US raised fears of US recession, foreign outflows from India and other emerging markets. There are fears that the lack of US market access would lead China to dump its overcapacity in Asia, including India. Add to that there are fears that since solutions to the tariff war would take longer and earnings forecasts for corporations globally are at risks.  

Hong Kong's Hang Seng cracked 10 per cent, while Chinese equities slumped 6-7 per cent. Japan's Topix and Nikkei 225 fell 7 per cent each, with the Japan’s stock exchange briefly halting trading in Nikkei stock futures as a circuit breaker kicked in.

"US stocks plunged while Asian equities also felt the pain amid tariff turbulence. Market positioning appears relatively light now, and thus a temporary short-lived rally from technically oversold levels is not ruled out," said Nomura.  

The foreign brokerage, however, believe any such rally to fade away. 

"Our sense is that the fundamental impact of tariffs/US slowdown is yet to come as tariffs weigh on US hard data over the next few weeks and months, which we believe the market will intensely scrutinize," it said.