After a slight upmove on Monday, markets fell sharply on Tuesday with the benchmark Nifty 50 ending the day with cuts of more than 350 points or 1.38%. The Sensex has also fallen more than 1000 points to end in the range of 82,180, with cuts of around 1.28%.
A host of factors contribute to the ongoing market pressure, including the rupee weakening further and a lack of support from foreign investors.
Here at NDTV Profit, we will take a look at five reasons why the markets fell sharply on Tuesday.
Rupee Weakening
Perhaps the biggest contributor to market pressure has been the rupee factor, with the local currency hovering near record low levels and weakening past the sentimental 91 per US dollar mark.
No FII Support
While the rupee continues to weaken, the Indian market has not received any support from Foreign Institutional Investors (FIIs) either, as they have continued their selling streak amid a cautious sentiment in the stock market.
US-India Trade
Arguably, the biggest driver of this cautious sentiment in the market has been the US-India trade deal overhang. While recent developments have indicated that the deal might just be around the corner, the lack of a concrete update and continued delay have kept investors cautious.
Global Risk-Off Sentiment
Another key factor weighing on markets is the broad 'risk-off' mood sweeping through global markets, with investors fleeing risk assets in favour of safe havens like gold. Geopolitical friction and new trade barriers have only reinforced this appetite for safe havens.
EU-USA Tariff Issues
Finally, the macro environment is clouded by the escalating US-EU trade standoff over Greenland. President Trump's threat of 10-25% tariffs on European allies has sparked fears of a wider trade war,
Watch LIVE TV, Get Stock Market Updates, Top Business, IPO and Latest News on NDTV Profit.