Why has India's stock market been falling for 6 consecutive sessions?

India's stock market has been ending in the red for six consecutive sessions, marking one of the longest losing streaks so far this year.

Indian stock market has become a victim of mounting global market tensions over a range of issues, some of which stem from US President Donald Trump's policy decisions. The Asian country's market, which usually stays insulated from global volatility, has experienced a crash in recent sessions.

Sensex has lost over 2,400 points and Nifty is down nearly 700 points in the last six sessions.(Mint)

Sensex, the bigger of the two market indices in India, has witnessed an over 2,400-point dip in its value, going from 78,583.81 at close on February 4 to 76,171.08 on February 12. On the other hand, Nifty has witnessed a nearly 700-point crash in its value, from 23,739.25 on February 4 to 23,045.25 on February 12. They have fallen around 3% each in that time period.

Among Sensex stocks, Mahindra and Mahindra, ITC, Power Grid Corporation of India, Reliance Industies, IndusInd Bank, Adano Ports, Titan and Infosys were the biggest losers. Bajaj Finserv, Tata Steel, Larsen & Toubro, UltraTech Cement, Kotak Mahindra Bank and Tata Motors were among the gainers.

Why the dip?

1. Trump's international tariff wars: One of the biggest reasons for the dip is US President Donald Trump imposing tariffs, some precautionary and others reciprocal. One of the first tariffs that Trump imposed were on Canada and Mexico (25% each) and on China (10%). Although he later withdrew the tariffs he imposed on Canada and Mexico after they agreed to strengthen their borders, he has not done the same with China so far.
2. US tariffs on aluminium and steel products: The country has also imposed tariffs on all types of aluminium and steel products that are imported into the country. This will help strengthen US' domestic industries. However, the tariffs have rattled the global share market, spreading uncertainties and sending share prices crashing.
3. FIIs on selling spree: Foreign Institutional Investors (FIIs) have been on a selling spree over the past few days. They sold equities worth ₹4,486.41 crore on Tuesday alone, according to exchange data.
4. Q3 earnings fail to deliver: Multiple companies have declared their financial results for Q3 (October-December 2024) quarter of FY25. However, they have been unable to spur widespread market growth, often due to disappointing performances or future growth forecasts.
5. US CPI data: Investors globally are also wary of the soon-to-be-released retail inflation data in US, which usually signals a global shift in prices of retail commodities.
6. Excessive stock valuations: Some traders may also be considering current valuations of Indian stocks as excessive. This may be because the Indian share market had seen tremendous growth over the past year and several trade analysts had warned that a correction in market sentiment may soon follow.