Why is stock market crashing today? 4 factors for BSE Sensex, Nifty50 plunging over 1%

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Indian stock market indices, BSE Sensex and Nifty50, suffered significant declines on Friday, triggered by US recession fears and new tariffs announced by American President Donald Trump.

Stock market crash: Indian stock market indices, BSE Sensex and Nifty50, crashed on Friday amid global market turmoil triggered by growing recession concerns and new tariff declarations from US President Donald Trump. BSE Sensex and Nifty50 plunged over 1%.

The total market value of BSE-listed companies reduced by Rs 9.47 lakh crore, reaching Rs 403.86 lakh crore, according to an ET report.

The following factors contributed to the stock market crash today:

1) Trade War Concerns Following Trump’s Tariff Announcement

Donald Trump intensified international trade tensions by implementing a universal 10% baseline tariff on U.S. imports. Nations with substantial trade surpluses face elevated tariffs: India (26%), China (34%), EU (20%), South Korea (25%), Vietnam (46%), Taiwan (32%) and Japan (24%).

“Markets are going through heightened uncertainty which is likely to last some time. A trade war has been triggered by Trump and retaliatory tariffs from China, EU and others are on the cards. This will only extend the period of uncertainty and confusion in the market,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. He indicated that reduced global trade and declining growth would affect India’s economy.

Also Read | Is it 26% or 27%? Donald Trump’s reciprocal tariffs on India revised downward to 26% in new White House document

2) Global Markets Tumble Amid Recession Concerns

Sharp declines hit Wall Street, with the S&P 500 shedding $2.4 trillion in value during its most significant daily decline since 2020. The downturn affected major global indices severely, with Japan’s Nikkei falling 3.4%, potentially facing its most challenging week since the COVID-19 downturn in March 2020.

The heightened uncertainty prompted investors to seek safer assets, resulting in increased investments in U.S. Treasuries and gold, indicating widespread caution in the market.

3) Indian Pharmaceutical Industry Faces Tariff Pressures

The pharmaceutical sector in India experienced significant losses after Trump indicated new sector-specific tariffs. Notable companies including Aurobindo Pharma, Laurus Labs, IPCA Laboratories, and Lupin saw declines of up to 7%.

During his Air Force One press interaction, Trump announced: “The pharma is going to be starting to come in at, I think, a level that you haven’t really seen before,” suggesting imminent trade actions.

He elaborated on the targeted approach: “We are looking at pharma as a separate category. We will be announcing that sometime in the near-future, not in the distant future”, suggesting specific measures for the pharmaceutical sector.

The announcement reversed the previous day’s gains, when pharmaceutical shares had risen on assumptions of avoiding trade restrictions.

Also Read | Donald Trump announces 26% ‘discounted’ reciprocal tariff on India: What will be the impact and is Indian economy relatively insulated?

4) Heavyweight stocks drag indices

Market leader Reliance Industries pulled down indices, with significant losses seen across major sectors. Nifty Pharma plunged (-6.2%), whilst Nifty Metal dropped (-5.3%). Other key segments including IT, Auto, Realty, and Oil & Gas witnessed declines ranging from 2-4%.

The widespread selling pressure reflected heightened investor caution, as both global uncertainties and sector-specific challenges weighed on market sentiment.

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TOI Business Desk

The TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.Read More

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