On February 3, 2025, the Indian stock market saw a significant decline. The BSE Sensex dropped by 319 points, and the Nifty 50 index went below 23,400. Investors were worried due to several reasons.
Main Reasons for the Market Fall:
1. Global Trade Issues
The United States announced new taxes (tariffs) on products from Canada, Mexico, and China. This news caused fear of a trade war, which led to a sell-off in stock markets worldwide, including India.
2. Weakening of the Indian Rupee
The value of the Indian rupee dropped sharply to 87 per U.S. dollar, the lowest it has ever been. A weaker rupee makes imports expensive, leading to higher prices of goods in India. This worried both investors and companies.
3. Impact on Different Sectors
Let’s look at how different business sectors were affected:
- Energy Sector: Shares of NTPC fell by 2.05% to ₹311.15. Tata Power’s shares dropped by 3.66% to ₹354.90, while Torrent Power’s shares also declined by 3.80% to ₹1,344.30.
- Banking Sector: Shares of State Bank of India (SBI) decreased by 0.67% to ₹761.00. However, IndusInd Bank’s shares saw a small increase of 0.33% to ₹1,012.70. Kotak Mahindra Bank’s shares fell by 0.94% to ₹1,885.20.
- Infrastructure Sector: Larsen & Toubro shares dropped by 4.64% to ₹3,287.25, which was a significant decline.
What Should Investors Do?
The combination of global trade tensions and the falling rupee has increased market volatility. Experts advise investors to remain calm and avoid panic selling. It is important to stay updated with market news and think long-term when making investment decisions.
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If you are investing, it may be a good idea to diversify your investments and consult financial experts to manage risks during such uncertain times.
