Markets: HMPV, Trump, and FIIs pull Indian stocks down by over 1.5%
Virendra Pandit
New Delhi: After a positive start to the New Year last week, Indian stocks plunged over 1 percent on Monday because of the rising concerns over the spread of another feared COVID-19-type pandemic, and also due to the potential global uncertainties after Donald Trump’s second-term beginning in the US on January 20, besides the foreign institutional investments (FIIs)’ volatile behavior.
According to a Monday afternoon update, fresh concerns from Human Metapneumovirus (HMPV)—which, like the SARS-CoV-2 is spreading worldwide from China—surfaced after two cases were detected in Karnataka and one in Gujarat. These two states, as well as Maharashtra, have issued health alerts and the Union Ministry of Health and Family Welfare is monitoring the unfolding situation closely, the media reported.
Towards the end of the year 2019, a new type of coronavirus called Severe Acute Respiratory Syndrome Coronavirus 2 (SARS-CoV-2) was identified as the cause behind the Coronavirus Disease 2019 or COVID-19. By March 2020, the World Health Organization (WHO) declared this COVID-19 outbreak as a pandemic. In the next two years, it wreaked havoc worldwide and dragged several economies, including that of China, down.
Now, the new potential threat from HMPV has started impacting nations. In India, it is seen as a key reason for the stock market crash on Monday.
The BSE Sensex plummeted 1.59 percent, or 1258.12 points, to close at 77964.99, while the broader NSE Nifty dropped 1.62 percent, or 388.70 points, to close at 23616.05.
At close, on BSE, Tata Steel, Kotak Mahindra Bank, NTPC, Power Grid, and Zomato were among the top laggards. All sectoral indices traded finished the session in red. Market experts said the fear around the HMPV is dragging the Indian markets down.
According to reports, the Indian Council of Medical Research (ICMR) has confirmed two cases of HMPV in Karnataka and one in Gujarat. Two infants at Bengaluru’s Baptist Hospital were found infected with this new virus, which causes lower and upper respiratory infections (like a cold). It is a seasonal disease that usually occurs in the winter and early spring, similar to Respiratory Syncytial Virus (RSV) and the flu.
Another key reason for a slump in Indian stocks is the upcoming inauguration of Donald Trump as the 47th US President on January 20. His threats to hike tariffs against imports from China, Canada, and Mexico—even India—have sparked uncertainties in global markets.
He has threatened to slap tariffs of at least 10 percent on goods from China and to impose levies of 25 percent on products from both Mexico and Canada. Also, expectations of stronger US markets during the Trump Presidency are driving investors to ‘sell India and buy US equities.’
Foreign Institutional Investors (FIIs) net sold (Indian) equities worth Rs 4,227.25 crore on January 3, 2024. Meanwhile, in January 2025, FIIs withdrew Rs 4,285 crore in the first three trading sessions.
These reasons impacted other markets also. The Asia-Pacific markets slipped with Japan’s Nikkei down 1.47 percent, Hong Kong’s Hang Seng down 0.52 percent, China’s mainland CSI 300 down 0.14 percent, and Shanghai down 0.14 percent. Similarly, the United Kingdom’s FTSE was down 0.44 percent.
The Ministry of Finance is now preparing to present the Union Budget for 2025-26 in the next three weeks. The National Statistics Office will release the first advance estimates of gross domestic product (GDP) for FY25 on January 7 amid a moderation in growth expectations. Experts believe resilience in rural demand, along with sustained agricultural and services-sector output, will keep India on a growth path towards achieving a 6.4-6.8 percent expansion in FY25.
