
Markets: After Trump’s return, India’s equity markets crash on “terrible Tuesday”
Virendra Pandit
New Delhi: In the global markets muddied by the new US President Donald Trump’s announcements and threats, and some other reasons, India’s bourses crashed on Tuesday, with the BSE Sensex sliding down to 1,432 points to hit an intraday low of 75,641.87. The NSE Nifty50, too, tumbled 367.90 points to hit a low of 22,976.85.
At close, the BSE Sensex was 1235.08 points lower or 1.60 percent down to settle at 75,838.36, while NSE Nifty50 settled at 23,024.65 with a loss of 320.10 points or 1.37 percent.
After taking oath as the 47th President of the United States, Trump said he was considering levying 25 percent import tariffs on Mexico and Canada as early as February 1. And, he was toying with the idea of hitting China with intensified tariffs over social media site TikTok.
While he gave a reprieve to the social media company, he said this extension will likely depend on the owner finding a US partner. “Should China not agree to that, I could use a tariff as a persuasion tool,” Trump said.
Another reason for the crash is the weaker third-quarter earnings by many companies. Investor sentiment turned sour as Q3 results season, thus far, has been underwhelming for most companies.
For example, Zomato, which was the biggest stock loser on the Sensex index today with a loss of over 11 percent, reported a 57 percent Y-o-Y slide in net profit at Rs 59 crore for the October-December quarter (Q3FY25). Sequentially, profit was down 66.5 percent. Dixon Technologies, which reported its Q3 results after market hours on Monday, plummeted nearly 14 percent in trade amid stretched valuations.
Overall, the net profit (adjusted for exceptional gains and losses) of the 162 early-bird companies, which reported their earnings until last Friday, was up 8.7 percent year-on-year in Q3FY25, an improvement from a 6.2 percent growth in Q3FY24 and 4.4 percent Y-o-Y growth in Q2FY25.
With Trump vowing to strengthen the US dollar and threatening the BRICS countries against floating their own currency, Foreign Institutional Investors (FIIs) have been on a selling spree since October 2024. By January 20, 2025, they sold stocks worth Rs 48,023 crore.
India’s market-wide selling pressure was evident in the broader indices, with the Nifty Next 50 falling 2.61 percent and the Nifty Midcap Select declining 2.78 percent. The banking sector also faced significant pressure, with the Nifty Bank index dropping 1.58 percent to 48,570.90.
“Markets were on a cautious mode in the past few sessions, but witnessed frenzied selling on Tuesday as investors now fear that Trump’s inaugural speech to safeguard America’s interest could hurt economic prospects of many countries, including India,” Prashanth Tapse, Senior Vice-President (Research) at Mehta Equities Ltd, was quoted as saying in media reports on Tuesday.
The market breadth was negative, with 2,785 stocks declining compared to 1,189 advances on the BSE. The session saw 103 stocks hitting 52-week highs, while 67 touched their 52-week lows. The volatility was evident by 241 stocks hitting the upper circuit and 243 on the lower circuit.
The gold market reacted positively to the global uncertainties, with the yellow metal gaining Rs. 398 to reach Rs. 78,942. Jateen Trivedi, VP Research Analyst at LKP Securities, said, “The rise was driven by heightened trade uncertainty following Trump’s announcement of raising tariffs on imports from Mexico and Canada. The new US President plans to implement a 25 percent tariff on imports from these countries by February 1.”