Stock market crash: A fierce “risk-off” sentiment has gripped the Indian stock market as investors faced another day of massive selloff on Wednesday. Sliding lower for the third day in a row, the Indian benchmark indices Sensex and Nifty 50 breached key technical and psychologically important levels in trade today.
Nifty 50 crashed over 300 points or 1.24% to trade below the 25,000 mark. Amid the sharp fall today, the index also breached the key 200 DMA level placed around 25,150, exposing it to further weakness.
At the same time, the BSE Sensex lost 1,050 points or 1.28% to 81,124 in today’s trading session, taking the three-day losses to almost 2,500 points.
Why is the Indian stock market falling?
The market is currently facing a perfect storm of global geopolitical tension and domestic fundamental weakness. The primary factor behind the stock market crash is US President Donald Trump’s “Greenland Tariff” ultimatum, which threatens 10-25% levies on European nations.
His warning has resulted in fresh global trade war fears and threats to disrupt the deals reached with the European nations a few months back. Trump has revived his tariff playbook since the start of 2026, warning 25% tariffs on countries doing business with Iran and up to 500% for buying cheap Russian crude oil.
This uncertainty, coupled with the rupee at a record low, has forced investors to aggressively dump emerging market assets like Indian equities in favor of safe havens such as gold and US treasury bonds, said Santosh Meena, Head of Research at Swastika Investmart.
Apart from this, lackluster earnings are also keeping investors on the backfoot. The third quarter was touted as the turnaround period for India Inc, but earnings misses from Reliance and IT heavyweights have fueled fears of slowing corporate growth.
Is Nifty 50 below 25,000 a warning sign?
While analysts believe that the current drawdown should be used as an opportunity to buy stocks, technical indicators signal that a deeper correction cannot be ruled out, especially in light of the breach of the important 200 DMA level.
Nifty has drifted below the 200-DMA near 25,150, which Meena said is widely regarded as the dividing line between a long-term bull and bear market. He warned that a decisive close below this level would be technically catastrophic, signaling a potential structural shift in the market trend.
Rupak De, Senior Technical Analyst, LKP Securities, said that the Nifty has just broken its long-term moving average (200 DMA). The overall picture was already weak, and after this breakdown, it is time to be more cautious, he warned.
“Going ahead, the Nifty currently has no meaningful support, with resistance placed at 25,200. The trend is likely to remain weak as long as the index stays below this level. Individual stock or index views may not work over the next 2–3 days. Focus mainly on Nifty and ignore sectoral indices for cues, as Nifty will be the key indicator during this period,” he said.
He further advised keeping leveraged positions low on both the long and short sides, as the market is likely to remain highly volatile.
Amid this backdrop, the strategy should be to sell between 25350-25400 but with a tight stop loss at 25500, advised Shrikant Chouhan, Head Equity Research, Kotak Securities. He added that if the market declines further, buy between 25050-25000, with a stop loss at 24900.
Fundamental analysts believe the time is right to double down on their bets, as such painful periods can be rewarding for investors in the long run.
Investing, at its core, is about buying businesses at reasonable valuations, and phases like these allow investors to accumulate quality stocks at relatively better prices, said Gurmeet Singh Chawla, Director, Master Capital Services.
“Gradual accumulation during corrections has historically delivered superior returns. Over full market cycles, this approach has repeatedly differentiated informed investors, as the benefits of compounding work most powerfully on investments made during periods of correction rather than periods of market highs,” he opined.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions.
