It’s similar to watching a roller coaster, except that this time, the markets are not just falling. They’re crashing. Following the largest decline in US stock markets since 2022, Indian stock markets plummeted on Tuesday. The Sensex fell about 400 points, and the Nifty fell more than 100 points, as a result of a sharp decline in IT stocks and growing concerns about a possible US recession.
According to reports, Monday witnessed the largest single-day decline in US markets since 2022, with the Dow Jones tumbling 2.08% and the S&P 500 and Nasdaq plunging as much as 4%. This sharp sell-off followed comments from former US President Donald Trump, where he evaded questions on whether the US economy could slip into a recession.
Trump’s trade policies and tariffs have also contributed to the growing uncertainty. According to analysts, investors’ confidence has taken a hit — the uncertainty has wiped out almost $4 trillion from the S&P 500’s peak last month, when Wall Street was confident about the US economy. Fears of a full-scale economic crisis have taken hold of the market as a result of the ongoing trade conflicts with nations like China, Canada, and Mexico.
Early on Tuesday, Gift Nifty futures dropped 160 points, indicating that Indian markets would have a difficult start. Nevertheless, there is optimism for India. The Nifty has only decreased 2.7% over the past month, compared to a 7.5% decline for the S&P 500. In fact, emerging markets like India may profit from the declining dollar index, which could limit capital flight.
In the short term, markets will be stock-specific, but analysts predict that as long as the Nifty remains below 23,000, the general mood will continue to be negative. Long-term investors can still add to their holdings of high-quality equities at current levels, though.
In a nutshell
· With a 3.09% decrease and a 52.65-point contribution to the Nifty’s decline, Infosys was the biggest loser.
· Mphasis dipped 1.88% and Wipro sank 2.21%.
· L&T Technology Services (LTTS) fell 1.69% and Coforge fell 1.79%.
· Tech Mahindra (TECHM) saw a 1.41% decline, while L&T Infotech & Mindtree (LTIM) witnessed a 1.52% decline.
· HCL Tech saw a 1.47% fall as well.
· Although it ended the day lower, Tata Consultancy Services (TCS) saw a decline of 0.10%.
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