Stock Market Updates: Sensex and Nifty down for Today, Know Why.

Sensex and Nifty Plunge Today: Key Reasons Behind the Dip

Written by: Supriya Kadu

Edited by: Pinky Deshmukh

Last Updated: January 27, 2025

Summary: The Sensex lost over 750 points, while the Nifty has fallen below 23,000 points.

The BSE Sensex and Nifty50 fell on Monday. At 10:35 a.m., the S&P BSE Sensex was down 818.36 points at 75,372.10, while the NSE Nifty50 was down 257.35 points at 22,834.85.

As the benchmark indices continued to fall and the mood remained bad across all sectors, bears took control of Dalal Street, and the stock market suffered yet another session of losses.

The decline was mostly caused by worries about poor company profits, uncertainty around US trade laws, and ongoing outflows of foreign capital.

While the primary sources of weakness were the metal and IT sectors, mid-cap and small-cap stocks were also under a lot of selling pressure. According to the analysts, global uncertainty, persistent selling by foreign portfolio investors (FPIs), and domestic concerns have contributed to the decline.

The selling pressure from Foreign portfolio investors (FPIs) is a major reason for the market's recent decline. In January alone, FPIs withdrew ₹69,000 crore from the Indian market. Meanwhile, domestic institutional investors (DIIs) made considerable purchases of ₹67,000 crore at the same time, although this amount fell short of the back-to-back withdrawals

Over in Asia, the markets had a mixed bag of results with South Korea, Taiwan, and Australia taking time off for holidays. The Nikkei 225 in Japan fell by 0.33%, while the Topix managed to rise by 0.62%. The CSI 300 experienced a tiny drop of 0.07%, but the Hang Seng index for Hong Kong saw an increase of 0.85%.

The US dollar fell on Friday, its worst week since November 2023, as Trump administration concerns over tariffs subsided. The dollar could rise if the US modifies its interest rate or tariff policies, several economists warned.

Colombia's unwillingness to accept deported illegal immigrants has sparked new concerns about the US placing a 25% tax on the country. Similar tariff threats against Mexico and Canada have raised worries about disruptions to international trade. Due to the instability of the market and economy brought on by these issues, investors are now more wary.

Investors booking profits ahead of the Union Budget 2025 is another factor contributing to the decline. Markets expect economic measures like income tax cuts, and GDP boost, but the uncertainty has made them more volatile.