On April 7, 2025, Indian stock markets witnessed a massive crash, wiping out approximately ₹19 lakh crore in market capitalization. The BSE Sensex plunged by 3,072 points (4.09%) to close at 72,296, while the Nifty50 fell 1,146 points (5%) to 21,758 — marking its lowest level in a year and its steepest single-day drop since June 2022.
Sector-Wise Impact:
- Nifty Metal dropped by 8%
- Nifty IT fell over 7%
- Nifty Auto, Realty, and Oil & Gas sectors each declined more than 5%
The broader markets also saw a sharp decline, with small-cap stocks down by 10% and mid-caps by 7.3%.
Key Reasons Behind the Crash:
- Nasdaq in Bear Market
The U.S. Nasdaq index officially entered a bear market, falling over 20% from its recent peak. This decline followed the announcement of new tariffs by the U.S. President, triggering fears of a global trade war and recession. - Global Recession and Trade War Fears
Growing concerns over a global economic slowdown and escalating trade tensions led to a widespread selloff across global markets. - Federal Reserve’s Outlook
The U.S. Federal Reserve indicated a slower pace of interest rate cuts, disappointing market expectations and leading to a ripple effect across Asian markets, including India. - Heavy FII Selling
Foreign Institutional Investors (FIIs) have been aggressively pulling out capital, with over ₹8,000 crore worth of selling recorded in recent sessions. - Record Low Rupee
The Indian rupee hit an all-time low of 85.3 against the U.S. dollar, triggering inflation concerns and weakening foreign investor sentiment.
What Should Investors Do?
Experts recommend investors remain calm and focus on long-term investment strategies. Emphasis should be placed on fundamentally strong large-cap stocks that can withstand market volatility.