Sensex and Nifty Fall Again: Why is Indian stock market crashing continuously?

Indian stock markets ended in the red on Friday as the Sensex and Nifty slipped due to losses in auto stocks and continued foreign investor selling. Weak global cues, including US market declines and concerns over trade tariffs, also affected investor sentiment.

The BSE Sensex dropped 424.90 points or 0.56%, closing at 75,311.06. During the session, it fell as much as 623.55 points to a low of 75,112.41. Meanwhile, the NSE Nifty declined by 117.25 points or 0.51%, settling at 22,795.90.

Over the last four trading sessions, the Sensex has fallen by 685.8 points (0.90%), and the Nifty has lost 163.6 points (0.71%), reflecting ongoing market weakness.

Top Gainers and Losers
Among Sensex stocks, Mahindra & Mahindra took the biggest hit, falling over 6%. Other major laggards included Adani Ports, Tata Motors, Sun Pharma, Power Grid, ICICI Bank, SBI, and UltraTech Cement.

On the other hand, some stocks managed to gain despite the broader market decline. Tata Steel, Larsen & Toubro, HCL Tech, Asian Paints, HDFC Bank, and NTPC were among the gainers.

Factors Affecting the Market
Several factors contributed to the market’s decline:

Foreign Institutional Investors (FIIs) continue to sell Indian equities, with Thursday’s data showing an outflow of Rs 3,311.55 crore.
A weakening rupee and high stock valuations are making investors cautious.
Global trade concerns, particularly the US threat of imposing tariffs, added pressure.
The hawkish tone of the US Federal Reserve's minutes suggested that interest rates could remain higher for longer, which could limit liquidity in emerging markets like India.
Prashanth Tapse, Senior VP (Research) at Mehta Equities, pointed out that Indian stock markets underperformed their Asian and European counterparts, which showed strong gains. Sectors like banking, IT, telecom, auto, realty, and oil & gas saw significant weakness.

Vinod Nair, Head of Research at Geojit Financial Services, explained that uncertainties around corporate earnings and trade risks are raising concerns about stock valuations. He added that India is lagging behind other Asian markets as foreign investors continue to pull money out of Indian equities in favor of China.

Global Markets and Oil Prices
Asian markets, including Tokyo, Shanghai, Seoul, and Hong Kong, ended higher on Friday. European markets were mostly positive, but US markets closed lower on Thursday, impacting sentiment.

Meanwhile, Brent crude oil prices fell by 0.59% to USD 76.05 per barrel, indicating weaker global demand concerns.

On Thursday, the Sensex had already declined by 203.22 points (0.27%) to close at 75,735.96, while the Nifty fell by 19.75 points (0.09%) to 22,913.15.