Share Market Crash: There was a sharp decline in the Indian stock markets on Monday 19 January. Sensex fell by more than 600 points in early trade. Whereas Nifty fell near 25,500. Investors’ morale weakened due to increasing tensions over global trade, continuous selling by foreign investors and weak quarterly results. Sharp selling was also seen in smallcap and midcap shares. The biggest decline was seen in IT, energy and real estate stocks.
Around 10:05 am, BSE Sensex was trading at 82,947.48, down 622.85 points or 0.75%. Nifty was seen trading around 25,515.15 with a decline of 182.1 points or 0.7%.
There were 5 big reasons behind today’s decline in the stock market-
1. Negative signals from global markets
US President Donald Trump has threatened to impose additional tariffs on eight European countries, due to which there has been increased volatility in stock markets around the world. Trump said that if the US is not allowed to buy Greenland, he will impose an additional 10% tariff on goods imported from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain from February 1. If the matter is not resolved even after this, then this tariff may increase to 25% from June 1.
Following this statement, Eurostoxx 50 and DAX futures in Europe fell by about 1.1%, while Japan’s Nikkei index fell by about 1%. Although US stock markets are closed for the ‘Martin Luther King Jr. Day’ holiday, US stock futures were seen trading 0.7% lower on Monday morning.
2. Uncertainty regarding Fed Chair
The stock market sentiment has also weakened due to uncertainty over the next chairman of the US Federal Reserve Bank. Trump says Kevin Hassett will not be appointed as the next chairman and he can remain as director of the White House National Economic Council. Hassett is considered to be in favor of cutting interest rates. Uncertainty over his appointment has weakened expectations of interest rate cuts in 2026, impacting global stock markets.
3. Continuous selling by foreign investors
Foreign institutional investors (FIIs) have withdrawn money from the Indian stock market for the ninth consecutive trading day. On Friday, he sold shares worth Rs 4,346.13 crore in the Indian market. According to VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services, “So far in the month of January, foreign investors have sold a total of Rs 22,529 crore. Even at the beginning of this year, India’s performance remains weak compared to other major global stock markets.”
4. Impact of weak Q3 results
The mixed results of the December quarter also increased pressure on the stock market. The Nifty IT index fell nearly 1% during trading today. The maximum decline of up to 9 percent was seen in Wipro’s shares. Banking shares also remained under pressure. ICICI Bank shares fell by about 3%. The bank underperformed market expectations in the December quarter due to higher provisions.
“Mixed results from blue-chip companies have kept the market in cautious mode. Due to these results, sentiment has weakened and there is limited buying seen in select stocks,” Prashant Tapase, senior VP (research) at Mehta Equities, told Reuters.
5. Rise in India VIX
India VIX index, indicating the nervousness present in the stock market, jumped more than 5% on Monday to reach 11.98. A rise in the VIX usually indicates that investors have become cautious and are avoiding risk at the moment.
Now what next?
Last week there was a lot of ups and downs in Nifty. During this period, Nifty made an upper level of 25,899 and a lower level of 25,473. At the end of the week it increased slightly and closed at 25,694, which still shows a state of confusion in the market. Technical analysts say that a spinning top candle has formed on the weekly chart, which indicates uncertainty at the upper levels. Also, Nifty is facing hurdles near the 50-day moving average (EMA).
On the daily chart, Nifty has closed below 25,700, indicating weakness in the near term. Currently, Nifty is trading below its 20-day and 50-day average, but remains above the 200-day average. Due to this, the medium term trend can still be considered positive. In the coming days, 25,875 will be the first major resistance for Nifty, after this the levels of 26,000 and 26,100 will be important. At the same time, on the downside, 25,600 and 25,450 can act as strong supports.
Also read- Wipro Shares: Wipro shares fell 9% in one fell swoop, fall after quarterly results; Buy, Sell, or Hold Now?
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