Sensex Tumbles Over 650 Points: Understanding Monday’s Sharp Market Sell-Off

The Indian stock market opened on a weak note on Monday, February 10, 2025, following global trade concerns and a sharp depreciation in the Indian rupee. As of 12:53 PM, the BSE Sensex was down by over 650 points, trading 0.85% lower at 77,202. The broader market sell-off erased ₹5.15 lakh crore in market capitalisation, bringing it down to ₹418.78 lakh crore.

US Tariff Warnings Fuel Market Anxiety

The key catalyst behind the market downturn was US President Donald Trump’s warning of fresh trade tariffs, set to be imposed this week. The announcement rekindled fears of a potential global trade war, leading to nervousness among investors. The proposed tariffs on steel and aluminium imports raised concerns about inflationary pressures and a possible slowdown in global trade, impacting investor sentiment worldwide.

Higher interest rates in the US, coupled with trade uncertainties, make emerging markets like India less attractive for foreign investors, prompting capital outflows from domestic equities.

Rupee Hits Lifetime Low: Another Blow to Market Confidence

The rupee added to the market’s woes by hitting a record low against the US dollar. In early trading, the Indian rupee depreciated to 87.95 per US dollar, breaching its previous all-time low of 87.5825 from last week. By midday, it was trading at 87.9325, down 0.6% on the day.

The sharp decline marked the rupee’s worst weekly performance since December 2022, with analysts predicting continued weakness due to the risk of new trade tariffs and upcoming US inflation data. A weak rupee increases the cost of imports, putting additional pressure on sectors dependent on foreign raw materials.

Sectoral Impact: Who Took the Biggest Hit?

The market breadth was notably weak, with 25 stocks in the red and only five managing to trade in the green. The sell-off was broad-based, with all sectoral indices trading lower.

• Real Estate Stocks Plunge: The BSE Nifty Realty index saw the sharpest decline. 
• Metal Stocks Under Pressure: The BSE Nifty Metal index followed suit, as fresh US tariffs on steel and aluminium threatened the global demand-supply balance, impacting major metal exporters.

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