Sensex tanks over 600 points: Why is the stock market down today?

Donald Trump's reciprocal tariff plan on India and other countries coupled with persistent FII selling dragged the Sensex, Nifty lower for the eight straight trading session on Friday.

Stock Market Crash, why are markets falling on Friday: Equity benchmark indices in India weighed under selling pressure for the eight straight trading session today on the back persistent selling by foreign institutional investors and fears of reciprocal tariffs by the US government.  The BSE Sensex slumped to a low of 75,440 in intra-day deals on Friday, February 14, 2025, and quoted with a loss of 628 points at 75,510 as of 2 PM. In the process, the BSE benchmark index has shed 3,073 points in the last eight straight trading sessions.  In the process, the BSE market capitalisation fell below $4 trillion mark for the first time in nearly 14 months. The total market cap stood at $ 3.98 trillion in Friday's intra-day trade.  Among the Sensex 30 shares - Adani Ports was the top loser, down nearly 4 per cent. Sun Pharma, UltraTech Cement, IndusInd Bank, NTPC and Mahindra & Mahindra were the other major losers, down 2 - 3 per cent. Only 5 out of the Sensex 30 stocks were seen holding gains in trade on Thursday.  Meanwhile, the NSE Nifty 50 index hit an intra-day low of 22,774 - its lowest point since the Lok Sabha Election result day low. The Nifty has tumbled 4 per cent in the last eight days.  Trump's inks memo on reciprocal tariffs  Healthcare and Capital Goods shares were the major laggards in trades on Friday. The BSE Pharma index plunged over 3 per cent after the US President Donald Trump announced his plan for reciprocal tariffs as early as April onwards.  The US President signed a memo, ordering his economic team to devise plans for reciprocal tariffs on every country taxing US imports, ramping up the prospects for a global trade war.  Speaking to the reporters, Donald Trump said "India has more tariffs than nearly any other country." He would enact import taxes on cars, semiconductors and pharmaceuticals "over and above" the reciprocal tariffs at a later date, Trump added.  That apart, Trump reiterated his threat of up to 100 per cent tariffs on BRICs nations - Brazil, Russia, India and China - if they pursue plans to shift away from the US dollar.  Broader indices crack  The broader indices witnessed deeper cuts, with the BSE MidCap and SmallCap indices down 2.8 per cent and 3.5 per cent, respectively.  The broader markets are witnessing intense selling pressure given the high-beta nature, wherein stocks react sharply to major news developments. That apart, the recent December quarter earnings broadly failed to meet Street expectations.  On Friday, Deepak Nitrite tumbled nearly 15 per cent. FACT, Delhivery, Kalyan Jewellers and JSW Infra were the other major losers - down 6 - 10 per cent. Glenmark Pharma, Dixon Technologies, Lupin, NAM-India, Coromandel Fertilisers, Gillette India, APL Apollo and Castrol were the other key losers.  In the case of SmallCap stocks - Senco Gold and Concord Biotech took a massive hit and were locked at the respective 20 per cent lower circuits. Manappuram Finance, Laurus Labs, Kalpataru Projects, KFin Technologies, PCBL and Natco Pharma cracked over 8 per cent each.  Analysts at Elara Capital believe that the market breadth cycle expansion seems to have peaked, and a period of contraction is likely to follow. In this period, trading activity tends to be polarized towards select stocks, mainly index heavyweights. Thus, causing a period of prolonged weakness in smaller cap stocks. READ MORE  Trump-Modi talks fail to lift market mood  The much-anticipated meeting of the US President Donald Trump and India's Prime Minister Narendra Modi did not yield any immediate positive news flow.  Modi and Trump announced a plan to negotiate the first tranche of a "mutually beneficial multi-sector bilateral trade agreement" by fall 2025 or the next seven to eight months.  Amid the bilateral talks, Trump emphasized that India will face his reciprocal tariff, insisting "whatever India charges, we charge them".  Modi and Trump set a "bold new goal" – Mission 500 – to more than double total bilateral trade to $500 billion by 2030. “The leaders resolved to expand trade and investment to make their citizens more prosperous, nations stronger, economies more innovative and supply chains more resilient. They resolved to deepen the US-India trade relationship to promote growth that ensures fairness, national security and job creation,” said the statement.  Persistent FIIs selling weighs  Foreign portfolio investors (FPIs) have net sold Indian stocks worth $10 billion (more than ₹97,000 crore) in the first six weeks of 2025 — the highest outflow ever recorded during this period. This massive selloff has led to the worst start for domestic markets in nearly a decade.  India has recorded the highest FPI equity sales among emerging markets (EMs). Taiwan follows, with FPIs selling $2.5 billion worth of shares in 2025.  Technical view on Nifty  The NSE Nifty is seen trading at its lowest point in nearly 10 months. The index is seen quoting below the key moving averages on the daily scale. Further, the weekly chart shows that the 20-WMA (Weekly Moving Average) at 23,970 is now seen on course to slip below the 50-WMA at 23,778. Technically, this trading pattern shall further weigh on the investor sentiment.  The Nifty is now within striking distance of the key long-term support at 22,450 levels - which is the 20-MMA (Monthly Moving Average). A key indicator the index has held since August 2020. Break and trade below the same can accentuate the fall towards 21,500 levels.  The overall bias for the Nifty is likely to remain tepid as long as the index sustains below 24,050 levels. Near hurdles for the index are placed at 23,250, 23,600 and 23,800 levels.