Stock market crashes, investors lose Rs 9 lakh crore in Sensex!
#News Bureau February 28,2025
There was a bloodbath in the stock market on Friday. The Sensex fell by more than 1400 points. That is, the Sensex fell by about 1.90 percent. This caused investors to lose about 9 lakh crore rupees. A fall of about 1000 points means that investors’ wealth decreased by Rs 7.46 lakh crore. Nifty has also fallen by more than 400 points i.e. 1.86 percent.
This fall in the stock market has come amid US President Donald Trump’s tariff threats and the possibility of India releasing third quarter GDP data. Meanwhile, other Asian stock markets also remained weak. However, apart from this, there are many other reasons due to which the market has fallen. These include a decrease in the income of Indian banks, an increase in US bond yields and FIIs moving from India to China.
FIIs’ Selling
There are reports that since the market reached its peak in September, foreign institutional investors (FIIs) have withdrawn about $25 billion. Foreign institutional investors (FIIs) are those who invest in the stock markets of other countries to earn profits. That is, they are no longer seeing profit in the Indian market. This happened when there are concerns about high valuations in the stock market and the slowing economy. According to a report, FIIs’ selling in the Indian stock market continues unabated. After selling shares worth Rs 81,903 crore through the exchanges in January, FIIs sold shares worth Rs 30,588 crore this month till February 21.
Tariff War
Amidst the continuous withdrawal of FIIs, the market has been shaken by the warning of tariff hike by US President Donald Trump. According to a PTI report, Geojit Financial Services Chief Investment Strategist VK Vijayakumar said, “Stock markets do not like uncertainty and uncertainty is increasing since Trump was elected as the US President.”
He said, “The announcement of tariffs by Trump is affecting the market, and the latest announcement of additional 10 percent tariff on China confirms this attitude of the market. Trump will use the initial months of his presidency to threaten countries with tariffs and then negotiate for a deal that is favorable to the US.”
Strong dollar
Another reason is that the US dollar is holding near multi-week peaks against other currencies. The dollar index against six major currencies hit 107.35 on Friday. This strength poses problems for emerging markets like India, raising the cost of foreign investment and forcing outflows of equities, reports the Times of India.
Inflation in Japan
Economic experts say that inflation in Japan is also a matter of concern. Recent data showed that core inflation in Tokyo rose 2.2 percent in February compared to a year earlier. Although core inflation slowed for the first time in four months, it remained well above the Bank of Japan’s 2 percent target. Experts say that this affected investor sentiment.
GDP data
The results of the October-December quarter of the current financial year are to be released on Friday. The growth rate of the Indian economy is expected to be 6.2-6.3 percent. Economic growth is likely to decline due to weak urban consumption and slowdown in real estate activity. According to credit rating agency ICRA, India’s GDP growth rate is estimated to be 6.4 percent in the December quarter.
