Stock Market Crashed Ahead Of US Inflation Data: Why Sensex Dropped By 420 Pts, Nifty Fell By 138 Pts?

Stock Market Crashed: In the second half of Friday's session, Sensex and Nifty plunged sharply. The 30-scrip benchmark dived by over 400 points to struggle around 77,200 levels, while NSE's 50-scrip benchmark dipped by over 137 points and erased its 23,500 pivotal levels. The performance comes ahead of US PCE inflation data, which could provide further clarity on Fed rate cuts in the later part of 2025.

Sensex, Nifty:

Currently, Sensex nosedived by 420.81 points and touched an intraday low of 77,185.62. Stocks like IndusInd Bank, M&M, Zomato, HCL Tech, Maruti Suzuki, Infosys, and Power Grid were major draggers, as they fell by 2% to 4.5%.

Nifty 50, meanwhile, plungeD by 138.3 points to hit an intraday low of 23,453.65. Nifty Midcap 100 was down by nearly 1%, while the Nifty Smallcap 100 index saw a marginal decline. India's volatility index was lower by 3.5%. Except for FMCG stocks, all other sectoral indices were in deep re.

The Nifty IT index emerged as the biggest loser with a decline of 2%, followed by the Nifty Media index, which also fell by 2%. Nifty Metal, Nifty Realty, Nifty Pharma, Nifty PSU Bank, and Nifty Auto indexes were down by more than 1% to 1.5%.

Why is the market down today?

As per Trading Economics, the BSE Sensex tracked a fall on Wall Street overnight amid concerns over a potential trade war following President Trump's announcement of new tariffs on foreign-made autos. Traders continued to monitor the US-India trade talks, focusing on key sectors, including pharmaceuticals and autos, ahead of the Eid al-Fitr holidays on Monday.

Furthermore, Trading Economics data revealed that capping the fall was a Reuters poll showing that the RBI is expected to cut interest rates for the second consecutive meeting due to easing inflation. For the month, the index is set to surge around 5.9%, recovering from a fall in the previous month, buoyed by renewed foreign inflows amid optimism about domestic economic data.

As per Dr VK Vijayakumar, Chief Investment Strategist, Geojit Investments, apart from the tariffs, the market will be looking forward to the April 9th monetary policy and after that the Q4 results.

The US PCE inflation data expected today may give an indication of the inflation trend in the US. But more important than that would be the inflationary expectations from Trump tariffs.

Morningstar revealed that forecasts for the February Personal Consumption Expenditures Price Index show inflation staying above the Federal Reserve's target, even as the inflationary impact of President Donald Trump's trade wars has yet to be felt. It added, economists expect PCE inflation to read at 0.3% in February, the same as in January, according to consensus estimates from FactSet. Year over year, the number is expected to be 2.5%-also the same as in January.

For Sensex, and Nifty, Shrikant Chouhan, Head of Equity Research, at Kotak Securities believes the key support would be 77,100 and 23,400. As long as, the benchmarks trade above these levels, the expert believes the bullish formation is likely to continue. On the higher side, 23,750/78000 and 23,800/78200 would act as key resistance areas for traders. Conversely, a dismissal of 23,400/77100 could change the sentiment. Below this level, the market could slip to 23,300-23,225/76800-76500.

Currently, Sensex and Nifty are above 77,270 and 23,470 levels.

March 28 is the last trading session of the current month, and also the financial year 2024-25.

Q4 earnings for FY25 will commence from April month. Big companies like Angel One, HDFC AMC, Infosys, HDFC Bank, ICICI Bank, HCL Tech, HUL, Mphasis, Nestle, KPIT Tech, India Cement, UTI AMC, Poonawalla Fincorp and IDFC First Bank are lined up to announce their financial results next month.