Stock Market Updates: BSE Sensex and Nifty Crashes Again.

Summary: The Indian equity indices, the BSE Sensex and Nifty50, had a sharp decline in trading on Monday morning.

Monday had a low opening for benchmark stock indices, the BSE Sensex and Nifty50, followed the negative global signals and the Asian market falls. The Nifty sank 227.45 points, or 0.97%, to conclude at 23,254.70, while the Sensex fell 694.10 points, or 0.90%, to settle at 76,811.86.

All sectoral indices were trading down after the opening bell. With a reduction of 3.19%, the Metal index experienced the largest decline, followed by the Realty index with a decline of 2.07%.

Other important indices that saw weaker trading included Nifty IT (1.44%), Bank (1.04%), Pharma (1.10%), Healthcare (1.01%), Oil & Gas (1.79%), and Financial Services (0.91%).

The BSE SmallCap index dropped by 1.53% while the BSE MidCap index fell by 1.49% in the overall markets. In the meantime, the India VIX, a measure of risk, rose 5.07% to 14.81.

Finance Minister Nirmala Sitharaman's announcement of Budget 2025 on Saturday, February 1st, is anticipated to boost a faltering economy and bring India one step closer to the government's objective of realizing "Viksit Bharat" by 2027. Investors, however, are probably going to take a cautious approach shortly.

The Indian central bank's policy rate announcement later this week, a possible trade war in the US, and continued selling by international institutional investors are some of the other factors that could affect market momentum.

Investors will also be closely monitoring the final January Manufacturing PMI data from China, India, the US, and the UK, as well as the third-quarter results from businesses like Divi's Laboratories and Power Grid Corp.

The FY26 Budget, which outlined specific goals in many areas, strengthened the fundamental pillars that would direct the nation's growth towards a Viksit Bharat, according to a separate statement from FM Nirmala Sitharaman.

Even with a strong budget, the market will feel the impact of Trump's tariffs and the increased global uncertainty that these "first wave of tariffs" have created. Keep in mind that the 25% tariffs imposed on Mexico and Canada are intended to punish countries for issues such as immigration and illegal fentanyl trade. Trump may potentially use tariffs against other countries for reasons unrelated to trade. 

Asia-Pacific markets were down Monday after US President Donald Trump imposed tariffs on China, Canada, and Mexico over the weekend.

The Topix declined 1.85%, Japan's Nikkei 225 down 1.99%, and Australia's S&P/ASX 200 fell 1.7%. The small-cap Kosdaq fell 2.64%, while the South Korean stock exchange's Kospi fell 2.43%. The Hang Seng Index for Hong Kong fell 0.52%.

In the meantime, as markets responded to the recently implemented tariffs, US stock futures fell on Sunday night. S&P 500 futures sank 1.6%, Nasdaq-100 futures lost 2.1%, and futures linked to the Dow Jones Industrial Average declined 463 points, or 1%.