Stock markets experienced a sharp decline on Monday as global concerns over new trade tariffs imposed by the United States dampened investor sentiment.
The 30-share BSE Sensex declined 319.22 points or 0.41 per cent to settle at 77,186.74, snapping its five-day rally. Intra-day, it tumbled 749.87 points or 0.96 per cent to 76,756.09. The NSE Nifty declined 121.10 points or 0.52 per cent to 23,361.05.
The benchmark BSE Sensex ended its five-day winning streak, closing 319 points lower amid heavy volatility.
The broader NSE Nifty also witnessed a decline, reflecting the cautious mood in financial markets.
The decline in Indian equities was influenced by global market weakness, particularly in Asian and European indices, following an announcement by former US President Donald Trump regarding new tariffs on key trading partners, including China, Mexico, and Canada. Investors feared that the trade war could escalate, negatively affecting global economic growth.
During the trading session, the Sensex dropped by 749 points at its lowest but managed to recover some losses, closing at 77,186. The Nifty also declined by 121 points, settling at 23,361.
Several blue-chip stocks, including Larsen & Toubro, Tata Motors, Hindustan Unilever, and Reliance Industries, were among the major losers.
However, some stocks managed to hold ground, with Bajaj Finance seeing over a 5 per cent rise. Other gainers included Mahindra & Mahindra, Bajaj Finserv, Bharti Airtel, and Maruti.
Asian markets, including those in Seoul, Tokyo, and Hong Kong, witnessed significant losses, while European indices also traded with deep cuts. The negative trend continued from Wall Street, where US stocks ended in the red on Friday due to concerns about the impact of tariffs on international trade.
Market analysts pointed to several factors contributing to the sell-off in Indian markets. The imposition of tariffs, which include a 25 per cent duty on most imports from Canada and Mexico and a 10 per cent duty on goods from China, triggered fears of a prolonged trade conflict.
Investors were also worried about the depreciation of the rupee, which could lead to continued selling pressure from foreign institutional investors.
Financial experts expressed concerns that the trade war could disrupt global supply chains and increase financial uncertainty. Market analysts noted that tariff conflicts rarely yield economic benefits and often result in prolonged instability, affecting investor confidence worldwide.
The uncertain outlook weighed heavily on Indian markets, which have been experiencing significant foreign fund outflows in recent days.
Meanwhile, Brent crude prices climbed by over 1 per cent to trade at USD 76.50 per barrel, raising concerns about inflationary pressures on the Indian economy. Rising crude oil prices often lead to increased costs for industries and could put further pressure on stock market performance.
Despite Monday’s losses, the domestic equity market had shown resilience in the previous trading session.
The BSE Sensex had eked out a marginal gain on Saturday, closing 5 points higher, while the Nifty had dipped slightly by 26 points. The stock market remained open for trading on Saturday due to the presentation of the Union Budget.
Foreign institutional investors continued to sell off Indian equities, offloading shares worth Rs 1,327 crore on Saturday. The sustained selling by overseas investors has been a concern for market participants, as it indicates a cautious stance towards emerging markets amid global uncertainties.
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