Indian stock markets witnessed a sharp decline on Friday as investor sentiment was dampened by growing concerns over a potential global trade war. Both the Sensex and Nifty plunged nearly 2 per cent each, driven by widespread selling across sectors.
As of 1:57 pm, the Bombay Stock Exchange (BSE) Sensex stood at 73,242.90 points, shedding 1,369.53 points, or 1.84 per cent. Meanwhile, the National Stock Exchange (NSE) Nifty was at 22,137.15 points, declining by 407.90 points, or 1.81 per cent.
The downturn comes amid apprehensions over escalating US trade tariffs, particularly following a fresh round of duties announced by President Donald Trump.
On Thursday, Trump confirmed that the 25 per cent tariffs on imports from Canada and Mexico would come into force on March 4, earlier than the previously indicated date of April 2.
Furthermore, he proposed an additional 10 per cent duty on imports from China, fuelling fears of heightened trade tensions.
Market Jitters Over Tariff Moves
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, observed that Trump's aggressive trade policy has rattled global markets.
"The spate of tariff announcements by Trump has been impacting markets, and the latest announcement of an additional 10 per cent tariff on China is a confirmation of the market view that Trump will use the initial months of his presidency to threaten countries with tariffs and then negotiate for a settlement favourable to the US," Vijayakumar said.
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China has reportedly warned the US of "countermeasures," raising fears of retaliatory action that could further destabilise global trade.
Since assuming office for a second term, President Trump has reiterated his commitment to tariff reciprocity, asserting that the US would match duties imposed by other nations, including India, to maintain what he described as fair trade practices.
These developments have unsettled investors, adding to the volatility in Indian markets.
Foreign outflows and domestic woes
Apart from trade-related concerns, the persistent outflow of foreign portfolio investments from Indian markets has also weighed heavily on equities.
The Sensex currently stands more than 12,000 points below its all-time peak of 85,978 points, marking a steep correction. So far, the benchmark index has lost about 7 per cent in 2025, reflecting investor uncertainty.
Weak economic growth at home has further contributed to the decline in market confidence.
The recent repo rate cut by the Reserve Bank of India (RBI) failed to provide any significant impetus, as global market volatility continues to dictate trends.
In 2024, Indian stock markets recorded a modest growth of 9-10 per cent, following a 16-17 per cent rise in 2023. However, 2022 saw marginal gains of merely 3 per cent.
Challenges such as sluggish GDP growth, persistent foreign fund outflows, rising food prices, and weak consumption patterns have kept investor participation subdued over the past year.
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