Stock Market Crash: Sensex Falls 600 Points, Nifty Below 22,900; Mid & Small-Caps Enter Bear Territory

India’s stock market extended its losing streak for the sixth consecutive session on February 12, 2025, as concerns over U.S. trade tariffs, weak earnings, and FII outflows weighed on investor sentiment. The Sensex plunged 676 points (-0.9%) to 75,616, while the Nifty slipped 191 points (-0.8%) to 22,879 in early trade. The broader markets took a bigger hit, with BSE Midcap and BSE Smallcap indices dropping 2-3%, entering bear market territory after falling over 20% from their all-time highs.

The mid-cap index is now down 18% from its September 2024 peak, while the Nifty Smallcap index has plummeted over 20% from its December 2024 high. With FIIs selling ₹17,129.5 crore worth of equities in February alone, the downward pressure on stocks continues.

U.S. Fed’s Stance and Inflation Data in Focus

Adding to market jitters, U.S. Federal Reserve Chair Jerome Powell indicated in a Senate Banking Committee hearing on February 11 that there was no urgency to cut interest rates, citing strong economic data and inflation above the Fed’s 2% target. This dampened expectations of an imminent rate cut, leading to cautious trading across global markets.

Ruchit Jain, Vice President at Motilal Oswal, noted that the Fed’s approach remains data-dependent, with ongoing uncertainties like tariffs potentially pushing inflation higher. Investors are also awaiting India’s inflation data, expected to drop to a five-month low of 4.6% in January, which could give the RBI room to address slowing economic growth.

Earnings Season and Market Reaction

• Weak Q3 earnings further dampened sentiment, with major companies reporting disappointing results:
• Ircon International shares plunged 8% after its net profit fell 64.6% to ₹86.59 crore in Q3 FY25 from ₹244.64 crore a year ago.
• Gopal Snacks tumbled 8% after reporting a 70% decline in net profit to ₹5.3 crore, impacted by rising costs.
• Hero MotoCorp, M&M, ITC, RIL, and Bharat Electronics were the worst-hit stocks on Nifty 50, falling 1-2% each.
• TCS, Tech Mahindra, Infosys, HCLTech, and Wipro emerged as the top gainers, rising nearly 1% each.
• Impact of U.S. Tariffs on Markets
• Donald Trump’s latest tariff announcement continues to weigh on investor sentiment. After imposing reciprocal tariffs on multiple countries, concerns have risen over its potential impact on India’s exports and overall trade balance. In response, India is considering tariff cuts in at least a dozen sectors to boost U.S. exports and align with domestic manufacturing goals.

With Prime Minister Narendra Modi set to visit the U.S. this week, discussions on trade policies and tariffs could influence market trends.

Global Market Trends

Global markets presented a mixed picture. Wall Street indices ended neutral on February 11, as gains in Coca-Cola and Apple offset losses in Tesla. Meanwhile, Asia-Pacific markets largely traded higher, shrugging off some of the U.S. tariff concerns.

Conclusion

With Nifty and Sensex losing 3% this week alone, market sentiment remains cautious amid global trade tensions, FII outflows, and earnings concerns. The mid- and small-cap indices officially entering bear market territory further highlights the broad-based selling pressure. Investors will closely watch India’s inflation data and PM Modi’s U.S. visit, which could determine the near-term market trajectory.