The selling in the market just does not seem to end with the Sensex plunging nearly 2000 points in just five days. There are many reasons for the sharp downturn including the massive FII outflows, strengthening dollar and continued earnings disappointment. However, the questions that is worrying everyone is when will the market stop falling? While there may not be a definitive timeline, experts advise watchout for fundamental triggers.
The key factors to watch out for now
Financial Express.com reached out to a host of market analsysts to get a sense of how they expect the markets to pan out going forward-
Trump Tariff woes- The big impact
The escalating Tariff war and the latest 25% Tariff on steel and aluminium imports by US is weighing on market sentiment. No points for guessing it is one of the key reasons for the continued downtrend in the market.
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Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services pointed out that the “ Reciprocal tariff is the next thing on Trump’s agenda. All eyes are on how India will be impacted as several sectors may see the effect including pharma, gems & jewellery, IT. With Modi meeting Trump, all eyes are on the possibility of some agreement that can enable level playing field for India. That could calm down market jitters to a large extent. On a more fundamental front, earnings recovery will take time but that’s a definitive trigger. In terms of FII selling, if outflows come down or even if they stop selling consistently, that will be a sign that bottom formation is in the vicinity.”
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The other big trigger for the the sharp downturn is no doubt the continued FII selling. The outflows that gained momentum October 2024 onwards has seen withdrawal of over Rs 2.75 lakh crore from Indian markets so far.
Siddarth Bhamre,
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