Market Plunge Amid Tariff Concerns

The Sensex experienced a dramatic drop of nearly 1,400 points on Tuesday, closing just above the 76k mark. This significant decline was attributed to growing concerns over potential tariffs and aggressive selling by foreign portfolio investors (FPIs).

Key Contributors to the Decline

Heavyweights such as HDFC Bank, ICICI Bank, RIL, and Infosys were among the major contributors to the index's worst day since February 28. Additionally, rising crude oil prices further dampened investor sentiment.

Market Reactions and Analysis

"The negative opening and bearish bias were anticipated as the Indian market needed to align with global market losses from the previous days," explained Satish Chandra Aluri of Lemonn, a tech-enabled broking firm.

Foreign vs. Domestic Investment Flows

Data revealed a stark contrast in investment flows, with foreign funds recording a net selling figure of Rs 5,902 crore, while domestic funds were net buyers at Rs 4,323 crore.

Volatility and Market Capitalization Impact

The India VIX, a measure of market volatility, surged by 10.5% to 13.9 points, reflecting heightened nervousness among investors. The day's losses wiped out approximately Rs 3.5 lakh crore from the market capitalization, settling at Rs 409.4 lakh crore.

Sectoral and Broader Market Performance

While the Sensex's drop was pronounced, the broader market showed resilience with the midcap and smallcap indices experiencing lesser impacts. Sector-wise, real estate, consumer durables, and IT stocks faced the brunt of the selling pressure.