The Indian stock market witnessed a catastrophic crash on what is now being called “Black Monday.” Within just 10 seconds of the market opening, investors lost a whopping ₹19 lakh crore. The Bombay Stock Exchange (BSE) Sensex plunged by over 3,300 points, while the Nifty also dropped by more than 5%, leaving investors and analysts stunned.
On April 7, 2025, the Sensex tumbled by 3,379 points (4.48%) to 72,633, while the Nifty 50 dropped by 1,056 points (4.61%) to 21,848. Just a trading day prior, the Sensex had closed at 75,364, while the Nifty stood at 22,904. The market capitalisation of BSE-listed companies decreased from ₹4,03,34,886 crore to ₹3,83,95,173 crore, marking a loss of ₹19.39 lakh crore.
What Triggered the Crash?
- Global Market Turbulence: The crash was primarily triggered by global financial instability, particularly driven by fears of an impending economic downturn. The ripple effects of a major sell-off in the American stock markets hit Asian and Indian markets hard.
- Political Uncertainty and Tariff Wars: Reports indicate that the U.S. is set to impose new tariffs, which analysts fear could escalate into an “economic nuclear war.” This led to panic selling across global markets, including India.
- Sector-Wise Impact: The crash was widespread, affecting all sectors. Notably, mid-cap and small-cap stocks were hit hard. Out of the 30 Sensex-listed companies, only Bharti Airtel remained in the green, while heavyweights like Tata Steel, Infosys, and Tata Motors saw significant declines.
Black Monday Crash: Why Did It Happen So Quickly?
Market analysts credit the quick plunge to algorithmic trading strategies that initiated collective selling in matter of seconds. Further, sentiment was aggravated by panic among investors, which created a sharp and continuous sell-off.
What Should Investors Do?
Financial advisors recommend a cautious approach, suggesting that long-term investors should avoid panic selling. Instead, they should focus on fundamentally strong stocks and diversify their portfolios to mitigate risks.
The Black Monday crash serves as a grim reminder of the volatility inherent in the stock markets, especially in a globally interconnected financial environment. While the reasons behind the crash include global political uncertainty and algorithmic trading, the full extent of the damage remains to be seen as markets continue to react to unfolding events.
Also Read: US Tariff Bomb Shakes Global Markets
