Stock market today: Benchmark stock indices Sensex and Nifty took severe hit on Wednesday, as the ongoing selling spree got extended to the sixth trading session, wiping a massive Rs 26 lakh crore off BSE market capitalisation in the process. The market value of all listed companies on BSE was on the verge of falling below the Rs 400 lakh crore mark in early trade.
Inflation is set to rise in the US, said market observers, with the US Federal Reserve in no hurry to cut rates. This has helped 10-year US treasury bond yields (4.55 per cent) and dollar index maintain recent gains. Trump tariffs are adding fuel to the fire.
There are concerns rupee may depreciate further, leading to foreign outflows that already touched Rs 88,000 crore in 2025 so far. FIIs were net seller of Rs 4,486.41 crore worth of equities on Tuesday, provisional NSE data showed. Earnings growth in Q3 was disappointing, raising fresh valuations concerns.
Sensex fell 835.66 points, or 1.10 per cent, to 75,457.94. Nifty stood at 22,818.95, down 252.85 points or 1.1 per cent. "Donald Trump began his second presidency with a sprint, signing executive orders at an unprecedented pace. The most economically significant action he has taken so far has been to raise tariffs, most notably the 10 per cent on China, which single-handedly raised the average tariff rate on all goods entering the US to 3.7 per cent from 2.3 per cent, Nomura noted.
Asian Paints, Bank of Baroda, Canara Bank, Coal India, DLF, Hero MotoCorp, IOC, Jio Financial Services, PNB, REC, Reliance Industries, Tata Motors and REC Ltd were some largecap stocks hitting their 52-week lows today. Six of every seven stocks trading on BSE slid. A total of 274 stocks including TARC Ltd, Jai Corp Ltd and KPI Green Energy Ltd hit their lower circuits.
Trump’s recently announced plan to impose 25 per cent tariffs on steel and aluminum will, if implemented, may raise the average tariff rate further to 4.1 per cent. "We now expect the Fed to hold rates steady through 2025, on our expectation that significantly more tariffs ahead will drive core inflation higher," Nomura said.
In his opening remarks prepared for delivery at a Senate Banking Committee hearing overnight, Fed Chair Jerome Powell said his central bank is in a hurry to adjust policy stance, as reducing policy restraint too fast or too much could hinder progress on inflation.
"Trump’s tariff tantrums have been impacting the markets for the last several days. Trump moving away from targeting specific countries like Mexico, Canada and to a lesser extent China, and moving to import tariffs on steel and aluminium on all countries, has aggravated the concerns. The European Union’s declaration that they will retaliate with counter tariffs has raised the probability of a full blown trade war. How this will pan out remains to be seen," said VK Vijayakumar of Geojit Financial Services.
Vijayakumar said Trump, however powerful he might be, cannot manipulate the laws of economics.
"When higher tariffs raise the inflation in the US and the Fed responds hawkishly, the US stock market will crash. This will restrain Trump. But it will take some time. Meanwhile, the drama and the volatility in the market will continue," he said.
"Investors can utilise the current weakness in the market to switch from the mid and smallcaps, which are even now overvalued, to the fairly valued largecaps. The market is in oversold territory and a pull back is likely, but since FIIs are likely to sell into a rally, the upside is capped," he added.
Akhil Puri, Partner, Financial Advisory, Forvis Mazars in India said that despite the ongoing correction, the market remains expensive, with stretched valuations and a sluggish earnings recovery outlook. While volatility persists, there is cautious optimism that, as both domestic and global challenges are addressed, the market could stabilize, laying the groundwork for a gradual and steady recovery in equity markets, he said.