Sensex Crashes Nearly 400 Points: What’s Behind Today’s Stock Market Fall?

The Indian stock market started the week on a weak note as both Sensex and Nifty slipped sharply in early trade on Monday. The Sensex dropped over 400 points, while the Nifty50 slid below the 25,200 mark, mirroring a global sell-off driven by fresh trade tensions between the United States and china.

Over the weekend, global investors were rattled after US President Donald Trump announced a 100% tariff on all Chinese imports starting November 1. Although he later toned down his remarks, saying the US does not intend to “hurt” China, investor sentiment remained fragile.

Asian markets opened in the red, reflecting widespread risk aversion. In India, the decline was amplified by profit booking following the previous week’s gains and a cautious mood ahead of important domestic developments, including the Tata Capital public issue, quarterly results, and inflation updates.

Among the Nifty50 stocks, ONGC, Tata Motors, and Adani Enterprises led the losers, while Indigo, Max Healthcare, Bajaj Auto, Bharti Airtel, and Asian Paints managed modest gains.

Market Volatility Expected to Rise

According to Anand James, Chief Market Strategist at Geojit Financial Services, traders should brace for heightened market volatility through the week.

“The week begins with an upside resistance near 25,460. However, volatility is likely to intensify as the days progress. A fall below 25,113 could force traders to exit long positions,” he noted, adding that immediate support lies around 25,230.

Ponmudi R, CEO of Enrich Money, echoed similar views, suggesting that the ongoing uncertainty over the US-China trade situation will continue to weigh on investor sentiment.

“Even though Trump softened his stance, investors remain anxious about the possibility of another trade war. Nonetheless, domestic factors like Q2 results, inflation data, and a strong IPO pipeline will drive short-term market direction,” he said.

Ponmudi also emphasized that the overwhelming response to recent IPOs, including Tata Capital and LG Electronics India, reflects healthy domestic liquidity and strong retail investor participation.

Should Investors Worry About the Market Crash?

Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, believes that the panic may be temporary. “The market seems to view this as another episode of sabre-rattling between the world’s two largest economies,” he explained.

He further highlighted that Foreign Institutional Investors (FIIs) have purchased equities worth over ₹3,200 crore in the last four trading sessions, underscoring the resilience of Indian markets.

“Domestic consumption-driven themes that are relatively immune to global trade shocks will continue to attract institutional inflows,” he added.

So, what’s really causing the Sensex and Nifty to fall today? It’s a mix of profit booking, global trade concerns, and cautious positioning ahead of key domestic events. While the fundamentals of the Indian economy remain strong, even a single policy statement or tariff-related headline can spark short-term volatility in such a sensitive market environment.

Investors are expected to stay watchful this week. However, with the earnings season, inflation figures, and a series of major IPOs on the horizon, the market could witness a sharp turnaround depending on how these catalysts unfold.

Disclaimer: The views and opinions expressed by analysts, brokers, and experts in this article are their own and do not necessarily represent those of the India Today Group. Investors should seek professional financial advice before making trading or investment decisions.