Today – 11th Feb 2025, the Indian stock market experienced a sharp decline as a mix of global trade tensions, continuous foreign fund outflows, and disappointing domestic earnings shook investor confidence. In recent weeks, market volatility has become a recurring theme, but today’s drop was particularly severe, leaving investors unsettled and rethinking their strategies. Here’s a closer look at what happened.
1. Global Trade Tensions
The market was rattled by U.S. President Donald Trump’s decision to impose a flat 25% tariff on steel and aluminium imports. This move, aimed at protecting domestic industries, has raised concerns about a potential trade war. The impact is being felt worldwide, and Indian investors are now worried that rising metal prices and uncertainty on the global stage will add to market volatility.
2. FII Outflow
Foreign Institutional Investors (FIIs) have been pulling out their money from Indian stocks. In January 2025, FIIs sold shares worth nearly ₹64,156 crore, and this trend has continued into February. With rising U.S. bond yields and a weakening rupee, many investors are looking elsewhere, putting additional pressure on the market.
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3. Weak Domestic Earnings
Several key sectors including banking, auto, metal, and IT reported disappointing third-quarter results. For example, Eicher Motors saw its shares drop by about 6% after missing its profit and margin expectations. This weaker-than-expected performance has added to the negative sentiment among investors.
4. Technical Challenges
From a technical perspective, both major indices have lost support. The Nifty 50 fell by 1.32% to close at 23,071, and the BSE Sensex dropped to 76,293. These levels suggest that the market is in a bearish phase, and investors are cautious about future gains. In the morning our Intraday Zone Indicator gave clear indication of Nifty going in bearish territory.
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5. Rupee Depreciation
Another factor weighing on the market is the Indian rupee, which closed at an all-time low of 87.95 against the U.S. dollar. This sharp depreciation, driven by tariff concerns and continuous FII outflows, not only makes imports more expensive but also undermines overall investor confidence.
Market Impact
The combined effect of these issues was clearly visible on the trading floors today. The BSE Sensex fell by over 1,100 points, while the Nifty 50 slipped below the 23,100 level. Overall, the market capitalization of all BSE-listed companies dropped by approximately Rs 9.87 lakh crore, bringing the total value down to around Rs 407.95 lakh crore.
Looking Ahead
The decline in the stock market today highlights the interconnected challenges of global trade policies and domestic economic performance. With the uncertainty surrounding U.S. tariffs and ongoing FII selling, investors are advised to remain cautious. It is important to keep a close watch on further developments in global trade and domestic earnings, as these factors are likely to influence market sentiment in the coming days.
