Why is market down today? Sensex falls 850 points
Indian equity benchmarks Sensex and Nifty50 fell sharply due to weak global signals and profit booking, with the BSE Sensex down over 800 points.
Indian equity benchmarks Sensex and Nifty50 saw a steep fall on Tuesday, May 20, dragged down by weak global signals, profit booking, and cautious sentiment from institutional investors.
The BSE Sensex dropped over 800 points, hitting an intraday low of 81,250, while the NSE Nifty50 fell below the 24,700 level, indicating widespread selling across various sectors.
Seven of the 13 major sectors were lower, with information technology and metal stocks leading the gainers. The broader small-caps were up 0.3%, while the mid-caps were down 0.1%.
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"The market is waiting for the next major trigger. It could be an India-US trade deal. It needs to be seen when it is announced," news agency Reuters quoted Dharmesh Kant, head of equity research at Cholamandalam Securities, as saying.
US President Donald Trump said last week that India had offered a trade deal that proposed "no tariffs" for American goods.
Metal stocks were top sectoral gainers after top metals consumer China cut benchmark lending rates for the first time since October to help buffer its economy from the impact of the trade war with the United States.
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Tata Steel and Hindalco Industries jumped 1.6% and 1%, respectively, and were among the top five Nifty 50 gainers.
Meanwhile, IT stocks rose about 1%, recouping most losses seen in the previous session after Moody's downgrade on the United States.
Why are Sensex, Nifty down today?
Market experts told news agency ANI that pressure in the US markets is evident, largely due to the lingering effects of tariff wars under President Trump's administration.
The tariff policy, which includes a minimum of 10 per cent duty on almost all imports into the US, has raised concerns about the future of global trade. The impact of this trade policy has been felt across financial markets worldwide, including India.
Ajay Bagga, a banking and market expert, told ANI, “EMs (Emerging Markets) will not be decoupled from a US slowdown, though a slow recalibration from US assets to Europe, Japan and EMs is definitely on. Indian investors have to hope that the US manages to stay on the course of a soft landing or a no landing, and US exceptionalism stays a core theme, despite the headwinds of tariffs and 'living beyond their means' coming home to roost”.
Adding to the pressure, the White House and the US Treasury strongly opposed Moody's recent downgrade of the US's "AAA" credit rating.
Despite these developments, US stock futures remained weak throughout the Asian and European trading sessions but managed to recover and close in green for the sixth consecutive day.
MSCI Asia ex Japan, which dropped 0.5% in the previous session, was on course to recover all its losses on Tuesday as investors took stock of the debt load of the world's biggest economy and awaited trade deals.
