Indian stock markets crashed on Friday, with Sensex dropping over 1,400 points and Nifty falling below 22,300.
Investors were on edge over upcoming GDP data and Trump’s new tariff remarks. The BSE market cap shrank by ₹5.8 lakh crore, while IT stocks took a heavy hit, plunging up to 4% after Nvidia’s earnings disappointment.
Wall Street had a quiet start on Friday as inflation data met expectations, keeping investors on edge. Concerns over U.S. President Donald Trump’s policies adding to price pressures made markets cautious.
At the open, the Dow edged up 20 points to 43,259. The S&P 500 slipped 4.8 points to 5,856, while the Nasdaq dropped 67 points to 18,477.
Key reasons behind the stock markets crash
Investor Caution Before GDP Data
Investor sentiment turned cautious ahead of the December quarter GDP data, which was set to be released after market hours. Concerns about slowing growth, earnings pressures, and ongoing foreign investor sell-offs have caused the markets to fall 14% from their peak in late September.
Tightening Liquidity
The RBI’s emphasis on containing inflation may have resulted in less money being available for the stock market, which would have made investors more wary.The Reserve Bank of India (RBI) may have been under pressure to tighten monetary policy in response to rising domestic inflation, particularly in the food and gasoline sectors.
IT Stocks Take a Hit
Asian markets dropped on Friday, with the MSCI Asia ex-Japan index falling 1.21%, following losses on Wall Street after Nvidia’s sharp decline. Tech stocks were hit hard, with the Nifty IT index sliding 3.2%. Permanent Systems, Tech Mahindra, and Mphasis saw losses of up to 4.5%.
Withdrawals from Foreign Institutional Investors (FII)
Given that FIIs frequently account for a sizable portion of trading volume in Indian stocks, ongoing sell-offs by foreign institutional investors may have further depressed the market.
IT Stocks Struggle
Technology stocks came under renewed pressure after Nvidia missed earnings expectations, sparking a global sell-off in AI-driven stocks. The Nifty IT index dropped 3.2%, with top losers falling by up to 4.5%.
A stronger dollar at 107.35 raised concerns, making foreign investments costlier and causing capital outflows from Indian equities.
A boy from Nasik committed suicide after market crash
As India’s equities markets reel from their worst losing run in almost three decades, news sources reported Friday that a 28-year-old bank employee in the Nashik region of Maharashtra committed suicide after losing Rs 16 lakh in stock trading.
After visiting the Trimbakeshwar temple on the occasion of Mahashivratri, Rajendra Kolhe, a resident of Vitai in Chandwad taluka, lit himself on fire in Pimpalgaon Bahula on Wednesday evening, local police said. He burned 90% of his body and died.
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