Stock Market Crash: Know Why Sensex Has Dropped 1,500 Points In 4 Days

Stock Market Crash: The stock market experienced a significant decline on Thursday. The Sensex fell 780 points to close at 84,180.96. The Nifty 50 also fell 264 points to close at 25,876.85. Thursday marked the fourth consecutive day of declines in the Indian stock market. 

What are the effects of the stock market crash?

This decline has caused concern for investors due to several factors. Geopolitical tensions, a potential 500% tariff from the US, and mixed earnings from companies have dashed market expectations. This decline has also impacted the market's total capitalization. The market cap of all companies listed on the BSE has declined by more than ₹9.90 lakh crore to ₹472 lakh crore in four days. This means investors have lost approximately ₹10 lakh crore in four days. The Sensex also declined by approximately 1580 points in these four days.

What are the reasons for the stock market crash?

Trump's 500% Tariff: US President Donald Trump has supported a bill imposing sanctions on Russia. Under this bill, tariffs of over 500% could be imposed on Russian imports. Trump is using this bill to pressure countries like India, China, and Brazil, which are buying oil from Russia at low prices. Although the bill has not yet been passed, Senator Lindsey Graham has said that a vote on it could take place next week.

Decline in Major Corporate Shares: Selling pressure continued on Thursday in major corporate stocks. Shares of HDFC Bank and Reliance Industries fell by up to 1%. Earlier this week, shares of these two major companies had fallen by up to 4%, further exacerbating the market decline. The metal index fell by 1.9%. The IT index fell by 1%.

Turmoil in Venezuela: The ongoing turmoil in Venezuela is impacting most commodity markets. This sudden upheaval has increased geopolitical uncertainty, particularly regarding Venezuela's petroleum reserves. This could impact global oil markets. This impact was also reflected in the stock market.

Slowdown in Global Markets: Asian stock markets were mostly down on Thursday. Investors remained cautious after a strong start to the year. MSCI's broadest index of Asia-Pacific shares excluding Japan fell 0.6%, while Japan's Nikkei fell 1.2% and China's CSI300 blue-chip index fell 0.8%. US Nasdaq futures were down 0.35%.

Fears of a Slowdown in Growth Rate: Concerns about domestic growth are also adding to investor caution. The National Statistical Office (NSO) has projected India's GDP growth at 7.4% in FY26, which is in line with ICRA's estimate. However, growth is expected to moderate in the second half of the fiscal year. ICRA estimates that growth will decline to 6.9% in the second half of FY26 compared to 8.0% in the first half. This softening in growth expectations, combined with external shocks, is creating a cautious mood among investors. Investors are also factoring in geopolitical and trade uncertainties, as well as slowing domestic demand.