Sensex, Nifty Slide Again: Why Are Stock Markets Falling Again? Top Reasons

Stock Market Today: After a brief bounce on Tuesday, Indian stock markets opened on a negative note on Wednesday, dragged down by weak global cues and rising economic uncertainty.

At 9:30 am, the BSE Sensex had dropped 425.34 points or 0.53% to 73,833.53, while the NSE Nifty was down 151.50 points or 0.67% at 22,384.35.

What’s Triggering the Fall?

Trump’s 104% Tariff on China

The biggest reason behind the negative sentiment is the escalating trade war between the U.S. and China. The U.S. government announced a massive 104% tariff on Chinese goods, effective from Wednesday. This includes a 50% hike added after China refused to lift its 34% retaliatory tariffs on U.S. products. China has responded strongly, calling the move “U.S. blackmail” and promising to fight back.

“With a whopping 104% tariffs on China likely to kick in today, “there is blood on the streets.” Uncertainty reigns supreme. How global trade and the global economy evolve from this chaos remains to be seen. The market downturns will provide opportunities for brave investors with a long-term time horizon,” said Dr VK Vijayakumar, Chief Investment Strategist, at Geojit Investments Limited.

Global Selloff and Weak Asian Markets

The tariff shock has sent ripples through global stock markets. Japan’s Nikkei index has fallen more than 3.5%, continuing its downtrend. South Korea’s Kospi has officially entered bear market territory after falling 20% from its July peak. Hong Kong’s Hang Seng Index fell by 377.34 points (1.87%), and China’s SSE Composite dropped 21.58 points (0.69%).  

Rupee Under Pressure

The Indian rupee also continues to weaken. On Tuesday, it tumbled 50 paise to 86.26 against the US dollar—its biggest single-day loss in nearly three months. This marks the rupee’s third straight session of decline, adding to investor concerns.

Oil Prices at 4-Year Low

Oil prices fell more than $1 a barrel on Tuesday, reaching a four-year low. Brent crude dropped by $1.39 (2.16%) to $62.82, while U.S. WTI fell by $1.12 (1.85%) to $59.58. Falling oil prices reflect investor fears of a slowdown in global demand due to the ongoing trade war.

Also Read: Crude Oil Dips Below $57 — First Time Since 2021! What’s Driving The Drop?

Hope from RBI’s Monetary Policy?

All eyes are now on the Reserve Bank of India’s (RBI) monetary policy decision, expected later today at 10 am. Many experts believe a rate cut could help support the economy and bring back investor confidence.

“There are strong expectations that the RBI governor may cut rates by 25 basis points in response to the global uncertainty and the potential economic impact of the tariff situation. We also expect him to maintain a dovish stance,” said Sugandha Sachdeva, Founder of SS WealthStreet.

She added, “Despite the sharp bounce, caution still lingers. While the market has recovered, the broader outlook is still clouded by uncertainty on the global tariff front. Key resistance levels are seen around 22,800 to 23,100 on the Nifty, which could limit further upside in the near term.”

“India will be one of the large economies least impacted by this Trump shakeout. Our domestic consumption segments are resilient. The 25 bp cut in policy rates expected in the monetary policy announcement today can give further monetary stimulus to the economy," said Dr Vijayakumar. 

"The Indian market has been the out-performer in the recent global sell-off. India’s outperformance will continue amidst the turmoil," he added. 

Stock Market On Tuesday

On Tuesday, markets staged a strong comeback after their worst fall in 10 months. The Sensex had jumped 1,089.18 points (1.49%) to close at 74,227.08, while the Nifty gained 374.25 points (1.69%) to end at 22,535.85, thanks to global recovery and bargain buying. However, the renewed global tension seems to have erased those gains quickly.