The Indian Stock Market is suffering heavy losses as of 7th April 2025. The Sensex has crashed nearly 4000 points Nifty 50 has come down to 21,750. It is being said that investors have already lost more than Rs 19 lakh crore in minutes after Monday’s Opening.
Share Market Crash: Why Market is Falling?
Here are 7 key reasons behind the bloodbath situation of the Indian Stock Market:
1. Donald Trump’s Tariff Policies
A key factor behind the current market slump is the bold tariff plan President Donald Trump revealed. On April 2, 2025, a day he called “Liberation Day,” Trump put in place all-around import taxes aimed at big trade partners such as Canada, Mexico, and China. This action caused a huge $3 trillion drop in U.S. market worth in just a few days, as investors worried about possible trade conflicts. The lack of clarity about how wide how long, and how other countries might hit back has shaken markets. Concerns about higher prices messed-up supply lines, and less world trade have hurt how investors feel.
2. Recession Fear in the US
The worry about the economic downtrend is getting higher for investors due to inflation challenges. The upcoming US Consumer Price Index report projected only a 0.3% rise in March. But experts suggest pending tariffs will lead to a big cost increase in access to the industries which will affect each and every product’s price from food items to daily essentials and luxury items.
As a result of this businesses will likely face less profits. This will result in US firms cutting down their expenses. This will affect hiring and recessions might start soon.
3. Global Market Crash
Not only the Indian Stock Market but markets around the globe have been affected. Japanese Nikkei recorded a 7% downfall, South Korea’s Kospi also fell by 5% and the Chinese Blue-Chip index also tanked by 7%.
4. Economic Slowdown
Recent data shows as the US Economy shows signs of upcoming recessions consumer spending will be affected heavily. This will impact US economic growth. Higher product prices will put a strain on user purchase power. The Federal Reserve Bank of Atlanta’s GDP Now model estimated a 2.8% decline in annualized growth for the running quarter. This economic slowdown combined with global demands will lead investors to dump stocks and turn toward safer assets like gold.
5. Vulnerability in Tech Sector
Tech companies are one of the key drivers of recent market gains. But these companies have also been hit hard. Apple and Nvidia heavily rely on the global supply chain, and after the announcement of Tariff changes these companies have suffered a significant amount of losses. Even their operations are under threat. The US Market Nasdaq has also fallen by 11% in just two days.
6. Investors Turning Towards Safer Alternatives
As the market bloodbath continues investors shift towards more safer options. This has made the market fall into more pressure. Demand for government securities pushed the 10-year US treasury yield down to 3.916%. Federal fund’s future has increased which indicates an additional 25 basis-point reduction in rates by the end of this year.
7. Panic Selling
As the stock market crashes and investors are shifting towards safer investments like gold and government bonds some investors are panicking. Many investors and institutions have borrowed heavy amounts to gain more returns during a bull market. But falling markets have forced them to sell assets even at losses this has affected the market, creating a panic selling situation.
