Stock Market Crash: ₹2.94 Lakh Crore Wiped Out; 5 Key Reasons Behind Tuesday’s Fall

New Delhi: Indian equity markets experienced a sharp downturn on Tuesday, with both BSE Sensex and NSE Nifty 50 plunging significantly. By 12:30 PM, the Sensex had fallen over 1,000 points to 82,274.88, while the Nifty 50 dropped 284.65 points to 25,428.35. The initial hour of trading alone saw nearly ₹2.94 lakh crore wiped off investors’ wealth, reducing the BSE’s total market capitalization to around ₹466 lakh crore.

Top 5 Reasons Behind the Fall

1. Heavy Selling in IT Stocks
   Major IT companies such as Tata Consultancy Services (TCS), Infosys, and HCL Technologies faced intense selling pressure. The trigger was Anthropic’s announcement that its Claude Code tool could help modernize legacy COBOL systems—an older programming language still used in critical infrastructure—raising concerns about traditional IT service revenues.
2. Trump’s New Tariff Threats
   Concerns over U.S. President Donald Trump’s trade policies added to market volatility. On Monday, Trump warned on Truth Social that countries attempting to circumvent recent court rulings could face steep tariffs. Following the Supreme Court’s strike-down of prior tariffs, Trump announced plans for a 15% global tariff under Section 122 of the Trade Act of 1974, fueling investor anxiety.
3. Weakness in U.S. and Asian Markets
   Asian markets also declined, influenced by overnight losses on Wall Street. Heightened geopolitical tensions and uncertainty around Trump’s tariff policy slowed market momentum. The MSCI Asia-Pacific ex-Japan Index fell 0.2% after six consecutive days of gains, while the S&P 500 and Nasdaq Composite dropped 1.0% and 1.1%, respectively.
4. Weekly Derivatives Expiry
   The fall coincided with the Nifty 50 derivatives weekly expiry, a period when traders typically square off or roll over positions. This adjustment of large option positions often creates higher volatility in the underlying index, intensifying selling pressure due to the closure of long positions and new hedging activity.
5. Weakening Rupee Against the Dollar
   The Indian rupee declined 0.07% to 90.95 against the U.S. dollar, prompting concerns over foreign capital outflows and increased import costs, especially for crude oil. This can dampen corporate earnings expectations and negatively affect overall market sentiment.

The combination of these factors created a perfect storm for Tuesday’s market decline, highlighting the vulnerability of Indian equities to global uncertainties, domestic currency fluctuations, and sector-specific triggers.