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Stock Market Crash Today: Indian benchmark indices, Sensex and Nifty, opened lower for the sixth consecutive session on Wednesday
Stock Market Crash
Sensex Crashing Today: Continuing its losing streak for the sixth straight session, at the day’s low, the Indian stock market benchmark Sensex plummeted by over 800 points in morning trade on Wednesday, February 12, amid mixed global cues. The 30-share index dropped from its previous close of 76,294 to 75,388, while the Nifty 50 slid below 22,800, falling by more than 1%.
On the sectoral front, the Nifty Bank, Auto, Metal, Pharma, Realty, Consumer Durables, and Oil & Gas indices all saw declines ranging from 1% to 2.5%.
In the broader market, the Nifty Smallcap100 index dropped by 2.9%, while the Nifty Midcap100 fell by 2.3%. Small and midcap stocks are approaching bear market territory, having declined around 20% from their all-time highs.
The total market capitalization of BSE-listed companies decreased by Rs 7.86 lakh crore, settling at Rs 400.66 lakh crore.
Around 10:55 AM, the Sensex was down by 488 points, or 0.64%, at 75,805, while the Nifty 50 had fallen by 152 points, or 0.66%, to 22,920.
Key Reasons Behind The Stock Market Crash On February 12
US Tariff Hike on Steel and Aluminum
On Monday, the US President announced an increase in tariffs on steel and aluminum imports from 10% to 25%, removing country-specific exceptions and product exclusions, and stated that global reciprocal tariffs would be introduced in the coming days.
Caution Ahead of New Income Tax Bill
A sense of caution ahead of the new Income Tax Bill could be contributing to the ongoing market selloff. Reports suggest that the bill, which was introduced by Finance Minister Nirmala Sitharaman in her Budget speech on February 1, is likely to be presented in the Lok Sabha on Thursday.
There are concerns over potential higher tax rates on financial securities under the new Bill. “Unsubstantiated fears of higher taxes on financial securities due to the implementation of the new Income Tax Bill have led to panic selling among vulnerable market participants. Some of this selling is also tied to margin calls on leveraged positions,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.
US Fed Chair Jerome Powell’s Hawkish Remarks
Expectations for additional US Federal Reserve rate cuts this year were dampened after US Fed Chair Jerome Powell reaffirmed a cautious stance on interest rates during his testimony before Congress on Tuesday. Powell indicated that the central bank is not under pressure to lower rates in the near future, as inflation remains high and the job market remains strong.
FPI Selloff
Foreign portfolio investors (FPIs) have been aggressively selling Indian equities since October of last year. In total, they have offloaded Indian stocks worth over Rs 2.8 lakh crore since then.
Weak Earnings and Elevated Valuations
Indian companies have reported weaker quarterly earnings for the last three quarters, which has made valuations unsustainable, leading to significant selloffs by foreign investors. The sluggish earnings have left the market struggling to sustain high valuations.
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