Indian stock markets experienced a significant crash on Friday, resulting in substantial losses for investors. Both Nifty 50 and Sensex, the major indices, plunged sharply in early trading.
Market News: A major crash hit the Indian stock market on Friday, leading to significant losses for investors. Both Nifty 50 and Sensex, the primary indices, plummeted into deep red territory during initial trading. Nifty 50 opened at 22,433 and dropped to a low of 22,120 during morning trading, while the Sensex fell from 74,201 to 73,173. This market crash amounted to approximately 1,400 points, resulting in crores of rupees in losses for investors.
Widespread Selling Across the Market
The impact of this crash was not limited to the main indices. The BSE Small-cap index saw a 3.40% decline, and the BSE Mid-cap index fell by approximately 3%. Sharp drops were observed in the shares of companies like Patanjali Foods, Granules India, Aditya Birla Real Estate, Deepak Fertilizers, and Redington. However, some stocks witnessed buying activity, including KEI Industries, Star Health and Allied Insurance, Polycab India, IIFL, RR Kabel, and Coal India.
Three Major Factors Contributing to the Market Crash
1. Uncertainty surrounding GDP data: The December quarter GDP data was scheduled for release on Friday evening. While investors anticipated a resurgence in India's economic growth during this quarter, concerns about a weak economic growth rate and substantial selling by foreign investors influenced market sentiment.
2. Strong selling by foreign investors: According to NSDL data, Foreign Institutional Investors (FIIs) have withdrawn ₹1,13,721 crore from the Indian stock market since the beginning of 2025. In February alone, FIIs sold ₹47,349 crore, while Domestic Institutional Investors (DIIs) purchased ₹52,544 crore.
3. Pressure on IT stocks: Weakness in tech stocks in the US market impacted the Indian IT sector. Following weak results from NVIDIA, AI-related stocks plummeted, putting pressure on Indian IT companies. The Nifty IT index fell by up to 3.2%, with companies like Tech Mahindra, Persistent Systems, and Mphasis witnessing share price declines of up to 4.5%.
Impact of Global Events
Former US President Donald Trump recently announced a 25% tariff on imports from Canada and Mexico, effective March 4th. Further tariff increases on goods from China and the European Union were also announced. These decisions have impacted global markets, and their direct effect was visible in the Indian stock market.
