Sat Mar 01 10:40:00 UTC 2025: ## Indian Stock Market Plunges on Domestic Concerns, Not Tariffs: Expert
**Mumbai, India** – The Bombay Stock Exchange (BSE) Sensex experienced a sharp 1,400-point drop (1.9%) on Friday, February 28th, extending a downward trend that began February 4th. The Sensex has fallen 6.7% year-to-date, from 78,500 to 73,000.
Contrary to popular belief, Anish Tawakley, Co-CIO, Equity at ICICI Prudential Mutual Fund, attributes this market downturn primarily to domestic factors rather than external threats like potential US trade tariffs. He emphasizes a slowdown in the Indian economy and overvalued stocks, particularly in the mid- and small-cap sectors, as the key drivers of the recent sell-off. Foreign portfolio investors (FPIs) and even some multinational company promoters have withdrawn funds, partly due to these high valuations.
Tawakley dismisses the impact of US trade tariffs, citing China’s sustained economic growth despite facing similar challenges. He argues that India’s economic fundamentals remain strong, with a healthy current account deficit and stable inflation. The main concern, he says, is weak demand, a problem he believes can be addressed through continued monetary and fiscal support. The recent Union Budget’s fiscal measures, along with further monetary policy support, are expected to boost consumption and investment, stimulating economic recovery. He highlighted the importance of easing housing prices to further drive recovery in the housing sector.
While acknowledging the recent sell-off, Tawakley maintains that there’s no fundamental instability in the Indian economy and predicts a return to growth within a quarter or two, contingent on continued supportive monetary policy. He specifically pointed to the need for the housing sector to recover to fully sustain this growth.
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