The Indian stock market experienced a significant downturn today, with the Sensex plummeting by 700 points and the Nifty falling below the 24,550 mark. Several factors contributed to this decline, creating a volatile trading environment for investors.

One of the primary reasons for the market fall is escalating global trade tensions. Renewed concerns about tariffs, particularly those stemming from the US, have created nervousness among investors. President Trump's recent threat to double tariffs on imported steel and aluminum has rattled global markets. These protectionist measures have sparked fears of a potential trade war, leading to uncertainty and risk aversion among investors. The situation is further complicated by simmering trade tensions between the US and China, with accusations from China that the US is violating their recent trade deal.

Another factor influencing the market downturn is profit booking in heavyweight stocks. Market experts have observed that investors are engaging in profit booking in specific prominent stocks, including HDFC Bank and Reliance Industries. This selling pressure on major market players has contributed to the overall decline of the benchmark indices.

Foreign portfolio investors (FPIs) have also played a role in the market's fall. There's evidence suggesting that FPI buying is losing steam, with data indicating that they sold Indian equities worth ₹6,449.74 crore in the cash segment in the previous session. This reduced buying activity can be attributed to a fresh uptick in the dollar index and stretched valuations of Indian equities.

Furthermore, the domestic market appears to be lacking fresh positive triggers. While there are positive domestic cues, such as a stronger-than-expected Q4 GDP print, a rise in GST collections, and optimism over a potential RBI rate cut, these factors are being overshadowed by global headwinds. The absence of new positive catalysts is preventing the key indices from breaking above their current range. Tepid earnings growth is also posing a challenge. While Q4 earnings were slightly better than expectations, forward estimates indicate weakness, making investors cautious.

A technical factor may also be contributing to the market fall. The market's inability to sustain gains and break through resistance levels could be leading to increased selling pressure.

Despite the current market downturn, some analysts remain optimistic about the medium to long term. They believe that the strong economic growth outlook will eventually support the market at lower levels. However, near-term triggers, such as earnings growth and geopolitical developments, will continue to keep investors on the sidelines.