By Shreyanka Nandan
India witnessed a sudden decline in the market on Monday for the ninth time this year. The incessant foreign capital has overflowed and the weakness in global markets hit the sentiment of the investors. Thus, if the decline continues through in this manner, it will touch the fifth consecutive day of losses.
From September 2024, the NSE Nifty 50 and the BSE Sensex have dropped 13.7% and 12% simultaneously, and marked as the worst downfall since 2020. According to Bloomberg data, Indian stocks’ overall market cap plunged nearly to $1.2 trillion compared to last year’s $3.99 trillion.
Stagnant global markets
After the fall of Asian peers in its worst session of the year according to lackluster US economic data, Indian stocks are probably following them. As per the report of Friday, both the S&P 500 and the Dow Jones Industrial Average slipped 1.7%, and the Nasdaq Composite 2.2%.
The expectation of inflation surged to a near 30-year high whereas the consumer sentiment declined more than anticipated. Production activity slowed in the largest economy of the world as the US Composite PMI fell to 50.4 in February from 52.7 in January and marked as lowest levels since September 2023. Chinese equities in Hong Kong and Shanghai both tanked. Japan’s Nikkei 225 slides to 1.4% and South Korea’s Kospi slides to 0.6% according to early Monday trade.
Selling of FPI
As per the report of February, the investors of foreign portfolios have net offloaded equities worth RS 23,710 crore, as per the data from the National Securities Depository Ltd. In January, it was preceded by a net selling of Rs 78,027 crore.
So far in 2025, they have sold equities worth Rs 1.01 lakh crore, according to NSDL data. 21.02.25, FPIs stayed at net sellers for the third straight day as their net offloaded stocks worth approx. Rs 3,449 crore.
The key reasons for this slide in the market are that Indian equities are less appealing, strong dollar-making and global tariff uncertainty, and capital pivot towards China.