Sensex Crashes Over 700 Points, ₹6 Lakh Crore Wiped Out: Key Factors Behind the Market Downturn

Indian stock markets witness a fourth consecutive session of selling pressure, as weak earnings, foreign outflows, and global factors weigh heavily on investor sentiment.

February 10, 2025: The Indian stock market faced another sharp selloff on Monday, February 10, marking the fourth consecutive session of declines. The Sensex dropped over 700 points during intraday trade, eventually settling 548 points lower at 77,311.80, while the Nifty 50 closed at 23,381.60, down by 178 points.

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The market selloff was widespread, with midcap and smallcap indices plunging by over 2% each. BSE-listed firms collectively lost ₹6 lakh crore in market capitalization in a single session, bringing the total to ₹418 lakh crore from ₹424 lakh crore the previous day.

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HDFC Bank, Reliance Industries, and Infosys emerged as the biggest drags on the Sensex, contributing significantly to the day’s losses.

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Key Reasons Behind the Market Crash

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1. Trump’s New Tariff Policies
   US President Donald Trump’s announcement of new 25% tariffs on steel and aluminum imports, coupled with plans for reciprocal tariffs on other countries, has spooked global markets. The uncertainty has added pressure on emerging markets like India.
2. Stretched Valuations Despite Corrections
   Despite a 9% correction from its all-time high, the Indian market remains among the most expensive globally. Market analysts, including valuation expert Aswath Damodaran, have raised concerns about excessive valuations.
3. Weak Corporate Earnings
   While Q3 earnings have shown marginal improvements, they remain insufficient to lift market sentiment. Analysts are awaiting stronger GDP growth signals and earnings rebounds to justify current valuations.
4. Heavy Foreign Institutional Investor (FII) Outflows
   February has already witnessed FIIs offloading over ₹10,000 crore worth of Indian equities. Since October, net outflows have surpassed ₹2.75 lakh crore, exacerbating market volatility.
5. Rupee’s Record Low
   The Indian rupee weakened further, opening at a historic low of 87.92 against the US dollar. A depreciating rupee accelerates foreign capital outflows, further pressuring equity markets.

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Market Outlook
Market experts advise sticking to high-quality, fairly valued large-cap stocks amidst ongoing volatility. “Until there are clear signs of economic recovery, markets are likely to remain range-bound,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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Tags: Sensex, Nifty 50, Indian stock market crash, FIIs, Trump tariffs, weak earnings, rupee depreciation, market volatility, investor sentiment.