ET Market Watch: Why Indian markets crashed - Trump tariffs & Rs 27,000 crore FII selloff explained
Hi, you're listening to ET Markets Radio. I'm your host, Neha Vashishth Mahajan. Welcome to a fresh episode of ET Market Watch, where we bring you the latest from the world of stock markets every single day. Let's get to it.
Indian equity markets ended the week deep in the red. The Sensex slipped 586 points, while the Nifty closed below 24,570.
But what exactly triggered this market meltdown?
Let's break down the six key reasons:
Reason 1: Trump's Tariff Bombshell
U.S. President Donald Trump imposed a sweeping 25% tariff on Indian exports.
Even though India avoided further penalties, the announcement rattled investors and revived trade war fears.
Reason 2: Relentless FII Selling
Foreign Institutional Investors have been dumping Indian stocks for 9 straight sessions.
The total outflow? A massive ₹27,000 crore.
On Thursday alone, they sold ₹5,589 crore.
FIIs have also built a record 90% short positions — the most bearish setup since March 2023.
Reason 3: Weak Global Cues
Asian markets fell across the board — with indices in Japan, China, Korea, and Taiwan all trading lower.
The MSCI Asia ex-Japan index dropped 1.5%, while European markets and U.S. futures also showed weakness.
Investors globally are turning risk-averse.
Reason 4: Dollar Index Surge
The U.S. dollar index climbed past 100, its highest in two months.
This has intensified FII outflows and raised the cost of foreign borrowing for Indian corporates.
Reason 5: Pharma Stocks Under Pressure
The White House urged 17 major drugmakers, including Indian pharma giants, to cut U.S. prescription prices.
Sun Pharma fell 4.5% after a downgrade, dragging down the entire Nifty Pharma index by 3.3%.
Reason 6: Technical Breakdown
From a technical standpoint, the Nifty broke below key support at 24,600.
Analysts now see the next stop between 24,400 and 24,180.
On the upside, 24,800 to 25,000 will act as a major hurdle.
So what's the bottom line?
A potent mix of trade tensions, relentless FII selling, and technical weakness is dragging the market lower.
Experts advise caution and a hedged approach until clear reversal signals emerge.
That's all from me today.
This is Neha Vashishth Mahajan, and you've been listening to ET Markets Radio. Stay tuned and stay informed.
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