Stock Market Crash: The Indian stock market crashed on Wednesday, tracking weak global cues. Sensex erased 74,000 mark, and Nifty 50 struggled around 22,340 levels. Despite sharp selling on Wall Street, the decline in Sensex and Nifty is at a slower pace. On March 12, broad-based selling was recorded across indices including midcap and small-caps. IT stocks were the worst hit.

Sensex, Nifty:

The 30-scrip benchmark Sensex plunged by at least 474.7 points to hit an intraday low of 73,604.31. While Nifty 50 tumbled by at least 157.2 points to hit an intraday low of 22,340.70.

Nifty Midcap 100 and Nifty Smallcap 100 indices plunged by 1% to 2%. Except for the banking and financial stocks, all other sectoral indices were in deep red. The Nifty IT index nosedived by 4%, followed by a 2% decline each in Nifty Metal, Nifty Realty and Nifty Media stocks.

Why Market Is Falling?

As per Trading Economics, traders continued to monitor global trade policy after President Trump’s threat to double his planned tariffs on steel and aluminium for Canada. Traders awaited India’s February inflation data later today, with the market expecting a 4% easing, the first time in six months below the RBI’s medium target range, raising hopes that the central bank will implement interest rate cuts.

Further, the Trading Economics report said, the tech sector mainly weighed on the index, plunging 3.1%, on concerns over U.S. growth, with Wipro slumping 4.9%, while Infosys plunged 4.3% after Morgan Stanley downgraded the stocks on concerns over slowing growth. Meanwhile, Reliance Industries rose 0.1%, while Bharti Airtel fell by 0.6% after both companies signed an agreement with SpaceX to offer Starlink’s high-speed internet services to their customers in India.

In the past five sessions, the Dow Jones Industrial Average has nosedived by 1,084.77 points or 2.55%, while the S&P 500 has plummeted by 209.29 points or 3.62%. Nasdaq took the most hit in terms of percentage, plunging by 876.87 points or 4.79%.

Since joining the White House in late January, the 47th President has announced intensive tariffs on foreign countries including Mexico, China and Canada. In the latest development, Trump threatened to double US tariffs to 50% on Canadian steel and metal imports but backed down from the plan hours later.

However, Canada will still face a 25% tariff which will come into effect from March 12. Mexico imports also face a 25% tariff, while 10% additional tariff on imports from China. Trump has also announced reciprocal tariffs for other foreign countries including the European Union, India, South Korea and more.

Trump’s tariff is likely to fuel a trade war with the countries facing the import tax from the US, especially China. Also, the 47th US President has not ruled out the possibility of a recession in the USA due to his tariff implementation.

What Should Investors Do?

As per Dr V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, investors should keep in mind two important features of the near-term trend in stock markets. Globally, the markets are weak and jittery on concerns arising from the tariff policy uncertainties. This is likely to linger and may even get worse as reciprocal tariffs kick in from early April. In this scenario there is no scope for a sustained recovery in global markets. In fact further downtrend is likely.

However, Vijayakumar added, even in this negative backdrop, the Indian equity market is showing some resilience. The fact that despite the sharp correction in US markets yesterday, Nifty recovered about 150 points from the lows and closed in positive territory, is an indication of the recent resilience and outperformance of the Indian market. This trend has fundamental support from leading indicators that suggest growth recovery and decline in inflation. India’s macros are looking much better now than say a month ago and this can continue to support the market.

Lastly, Geojit’s strategist said, “It is difficult to call the bottom of this downtrend. However, investors should understand that valuations are attractive in many segments and the risk-reward is favourable if investors have a long-term time horizon of three years.”