SENSEX falls 800 points, NIFTY50 slips below 22,600; key factors behind sharp fall in market today

The S&P BSE SENSEX crashed as much as 769.43 points, or 1%, in the morning trade, to 74,541.63, while NSE's NIFTY50 index fell as much as 247.55 points, or 1%, to 22,548.35 levels.

The broader market indices, too, tumbled in the trade.

Sectorally, barring pharma and healthcare, all other indices were trading in the red.

Sell-off in US stocks on weak economic data

US stocks fell sharply on Friday, February 21, as a host of economic data showed that sentiment among consumers and businesses has taken a hit a month into Donald Trump’s presidency.

Further, data showed that sales of previously owned homes dropped 4.9% in January compared to the previous month as buyers struggled with persistently high mortgage rates and elevated prices across the US.

Besides, a closely watched measure of consumer confidence issued by the University of Michigan fell sharply in February from January. The survey also showed long-term inflation expectations reached the highest level since 1995.

The Dow Jones dropped 1.69% to 43,428.02, the S&P 500 fell 1.71% to 6,013.13, and the Nasdaq Composite slid 2.20% to settle at 19,524.01 levels.

Decline in oil prices

Oil prices slipped in early trade, extending their losses from last week, on the prospect of a resumption of exports from Kurdistan's oilfields, while investors awaited clarity on talks to end Russia's war on Ukraine.

Both contracts dropped by more than $2 on Friday, posting weekly declines as well.

The resumption of oil supply from the Kurdistan region potentially means adding more supply to the oil market and weighing on prices.

Hence, investor sentiment all over the globe took a hit.

Consistent foreign fund outflows

Foreign investors have pulled out over ₹23,710 crore from the Indian equity markets so far this month, pushing total outflows past ₹1 lakh crore in 2025 amid rising global trade tensions.

According to the data with the depositories, foreign portfolio investors (FPIs) offloaded shares worth ₹23,710 crore from Indian equities so far this month (till February 21).

This came following a net outflow of ₹78,027 crore in January. With these, the total outflow by FPIs has reached ₹1,01,737 crore in 2025 so far, data with the depositories showed.

This massive selling has resulted in the Nifty yielding negative returns of 4% year-to-date.

Market concerns heightened following reports that US President Donald Trump was considering imposing new tariffs on steel and aluminum imports, along with reciprocal tariffs on several countries, Himanshu Srivastava, Associate Director-Manager Research, Morningstar Investment Research India, said.

These developments reignited fears of a potential global trade war, prompting FPIs to re-evaluate their exposure to emerging markets, including India, Srivastava added.