The BSE Sensex tumbled 605 points, or 0.78%, to 77,412, while the Nifty50 dropped 139 points, or 0.59%, to 23,529 around 2:42 pm. This pullback follows a seven-session surge, during which Sensex soared 4,189 points and Nifty climbed 1,271 points. Barring auto stocks, all sectoral indices were in the red.
The market capitalisation of all listed companies on BSE declined by Rs 1.7 lakh crore to Rs 413.28 lakh crore.
Why is the stock market down today?
1) Uncertainty over U.S. tariffs
Investors remain cautious over potential US tariffs under President Donald Trump’s administration. While reports suggest that not all proposed tariffs will take effect by the April 2 deadline, the lack of clarity has fueled global market volatility. Any escalation in trade tensions could impact Indian exports, particularly in sectors like IT and pharmaceuticals, which have significant exposure to the US market.
2) Profit booking after a strong rally
The Nifty and Sensex gained nearly 5.7% over the past seven sessions, turning positive for the year. Investors appear to be booking profits after the recent rally, leading to a market pullback. The sharp rise in valuations over a short period has also made some traders cautious, prompting a sell-off in heavyweight stocks.
3) Oil prices at a three-week high
Crude oil prices rose on Wednesday amid supply concerns, as the US tightened restrictions on Venezuelan and Iranian oil exports. A larger-than-expected drop in US crude inventories also pushed prices higher.Brent crude futures touched $73.22 per barrel, while US West Texas Intermediate (WTI) crude rose to $69.16 per barrel, hitting their highest levels in three weeks. Rising crude prices can increase India’s import bill, impacting inflation and corporate margins, particularly for sectors reliant on fuel, such as aviation and logistics.
4) Decline in index heavyweights
Stocks in the banking, finance, and IT sectors weighed on the market. HDFC Bank, Infosys, Axis Bank, Kotak Mahindra Bank, Reliance Industries, Bajaj Finance, and ICICI Bank together contributed to a 440-point decline in the Sensex. IT stocks remained under pressure on the back of global macroeconomic uncertainties.
5) Rebound in Dollar index and US Treasury yields
The US Dollar Index, which tracks the greenback against six major currencies, surged 0.12% to 104.31 after briefly dipping to the 103 level. A stronger dollar typically leads to foreign fund outflows from emerging markets like India, adding to market weakness.
Meanwhile, the US 10-year Treasury yield rose to 4.32%, up from 4.25% last Friday. Higher bond yields make US assets more attractive to investors, leading to a shift in global capital away from emerging markets and putting additional pressure on Indian equities.
