The Indian stock market witnessed an across-segment selloff on Monday, January 19, on profit booking amid weak global cues. Benchmarks, the Sensex and the Nifty 50 fell by almost a per cent, with heavyweights, including Reliance, ICICI Bank, and HDFC Bank, among the top drags after their Q3 results.
The Sensex crashed nearly 700 points, or 0.80%, to an intraday low of 82,898.31, while the Nifty 50 dropped to 25,494.35 during the session, falling by nearly 0.80%.
The BSE Midcap and Smallcap indices also fell by up to a per cent. Investors lost more than ₹2 lakh crore as the overall market capitalisation of BSE-listed firms dropped to below ₹466 lakh crore from nearly ₹468 lakh crore in the previous session.
Why is the Indian stock market falling?
Let’s take a look at five key factors behind the fall in the Indian stock market:
1. Trump’s tariff threat
US President Donald Trump threatened tariffs against eight European nations, effective from February 1, over Greenland.
Trump said in a post on Truth Social that starting 1 February, Denmark, Norway, Sweden, France, Germany, The United Kingdom, The Netherlands, and Finland will be charged 10% tariff on all goods they export to the United States. On 1 June, the tariffs will increase to 25% and remain at 25% until a deal regarding “the complete and total purchase of Greenland” is finalised, he said.
Trump’s tariff threat attracted sharp reactions from European Union leaders, with media reports suggesting several of them discussed possible retaliation, including bringing back last year’s plan to impose tariffs on US goods.
“We don’t know now how President Trump’s disruptive policies are going to impact international trade and global economic growth. How the European nations are going to react to President Trump’s latest Greenland tariffs remains to be seen,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
“If Trump walks his talk and imposes 10% tariffs on the eight European countries on February 1st and follows it up by raising the tariffs to 25% from June 1st onwards, retaliation by the European bloc is almost certain,” said Vijayakumar.
(This is a developing story. Please check back for fresh updates.)
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Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
