Wed Feb 12 09:59:34 UTC 2025: **Indian Stock Market Plunges Amidst Global Uncertainty**

**MUMBAI, INDIA –** India’s benchmark stock indices, the Sensex and Nifty, suffered a significant downturn on Wednesday, marking the sixth consecutive day of selling. The combined market capitalization on the Bombay Stock Exchange (BSE) plummeted by a staggering Rs 26 lakh crore (approximately $3.2 billion USD), nearing the Rs 400 lakh crore mark.

The sharp decline is attributed to a confluence of factors, including rising inflation in the US, the continued strength of the US dollar and 10-year US treasury bond yields (4.55%), and escalating concerns over Donald Trump’s trade policies. Trump’s tariffs, particularly the 10% levy on Chinese goods, are cited as a key driver of inflation, prompting the US Federal Reserve to maintain its current interest rate stance. This has led to fears of further rupee depreciation and increased foreign institutional investor (FII) selling; FIIs sold Rs 4,486.41 crore worth of equities on Tuesday alone. Disappointing Q3 earnings further dampened investor sentiment.

The Sensex closed down 835.66 points (1.10%) at 75,457.94, while the Nifty fell 252.85 points (1.1%) to 22,818.95. Several large-cap stocks hit their 52-week lows, and a majority of stocks on the BSE experienced losses.

Market analysts express concerns about the potential for a full-blown trade war, as the European Union has threatened retaliatory tariffs against Trump’s steel and aluminum import tariffs. While some believe the market is oversold and a rebound is possible, the continued FII selling and high valuations limit the potential upside. Experts advise investors to consider shifting from mid- and small-cap stocks to more fairly valued large-caps. Despite the correction, the market remains expensive, according to some analysts, and a steady recovery is anticipated only after both domestic and global challenges are addressed.

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