The Indian stock market experienced a sharp decline on Thursday, with the BSE Sensex falling 644 points to close at 80,951.99 and the NSE Nifty slipping 203 points to end at 24,609.70. The sudden reversal from Wednesday’s rally has reignited investor concerns and created a cautious atmosphere in the market. Several factors contributed to the market crash, including global economic uncertainty, former U.S. President Donald Trump’s proposed tax and spending bill, rising tensions between Israel and Iran, and renewed COVID-19 concerns in Southeast Asia.
Investors remain wary of the potential impact of these issues on the global economy and market sentiment. The U.S. fiscal situation is a major concern, as Trump’s proposed bill could significantly increase the national debt by $3.8 trillion while slowing economic growth. The upcoming vote in the U.S. Congress has intensified investor anxiety.
Market reacts to U.S. fiscal concerns
Additionally, heightened geopolitical tensions between Israel and Iran, with reports suggesting a possible military strike on Iran’s nuclear facilities, have rattled global markets. The spike in COVID-19 cases in several Southeast Asian countries has also added to the nervousness, raising concerns over potential disruptions to supply chains and economic recovery.
Several blue-chip stocks were hit hard in the market decline, including Mahindra & Mahindra, Bajaj Finserv, Tech Mahindra, Hindustan Unilever, Reliance Industries, Tata Consultancy Services, and Tata Motors. The Midcap Index also declined, amplifying the overall negative sentiment in the broader market. Vivek Kumar M, a market analyst, commented on the situation, saying, “The Indian market is reacting to external cues, primarily the concerns surrounding the U.S. fiscal situation.
Rising U.S. Treasury yields add to the risk-off sentiment, leading to a pullback in equity markets globally.
Investors are advised to remain cautious and stay updated on global fiscal developments as the market navigates through this period of heightened volatility driven by external economic factors.
