Share Market Crash: The stock market's rally before the budget is indeed worrying, as the Economic Survey projected strong growth for the Indian economy. However, its impact was not visible today.
Why did the stock market crash before the budget? What are the reasons for investor pressure?
Share Market Crash: The stock market appeared to be in a bad shape on the last trading week before the budget. After three consecutive sessions of gains, the stock market opened lower on Thursday. Around 9:30 am, the BSE Sensex opened at 81,947, down 619 points. Meanwhile, the Nifty also traded at 25,248, down 171 points.
Finance Minister Nirmala Sitharaman presented the Economic Survey in Parliament on Thursday, projecting strong growth for the Indian economy. Despite this, the stock market experienced a significant decline today. Let's explore the reasons behind today's stock market crash.
selling pressure
Selling by foreign investors is a major reason for today's stock market decline. Foreign portfolio investors have sold Indian shares worth ₹43,686.59 crore so far in January. Previously, a record outflow of nearly $19 billion occurred in 2025. On January 29th alone, foreign institutional investors sold shares worth ₹394 crore, increasing market pressure. However, domestic investors have managed to somewhat stabilize the situation by purchasing shares worth ₹2,638 crore.
Rupee depreciation is also a reason.
The rupee's decline against the dollar has also impacted market sentiment. On Friday, the rupee opened at 91.9125 against the US dollar, almost equal to its previous close of 91.9550. On Thursday, it reached an all-time low of 91.9850. So far this month, the rupee has fallen by approximately 2.3%. It is now slowly approaching its worst monthly performance since September 2022. This decline has made investors cautious, as a weak rupee could increase input costs for companies, potentially burdening several sectors.
Sectoral indices also fell.
Sectoral trends are also a major reason for today's market decline. Most sectoral indices traded in the negative zone in early trade. The Nifty Information Technology index fell more than 1%, with all its stocks trading lower. The Metals index fell nearly 4%, with stocks like Hindalco and Tata Steel suffering losses.
Other sectors, such as financials, oil and gas, and capital goods, also remained under pressure. Furthermore, rising crude oil prices are a concern. Rising crude oil prices and ongoing geopolitical uncertainties have increased volatility in global markets.
Dr VK Vijayakumar, Chief Investment Strategist at Geojit, said the market is currently facing both headwinds and tailwinds as the Budget approaches. "Geopolitical issues are troubling global trade, including Trump's continued threats to weaponise tariffs. The rise in Brent crude prices to around Rs 70 is a headwind for Indian macros," he said.
