Indian stock markets were rocked by a dramatic sell-off on Monday, as escalating trade tensions between the United States and China rattled investor sentiment across global financial hubs. With panic spreading through Asian markets, the Sensex plunged nearly 3,000 points, while the Nifty fell below the psychological 22,000 mark, wiping out billions in investor wealth in a single trading session.
By midday, the benchmark BSE Sensex had slumped 2,979 points, or 3.95 per cent, to 72,385.4. The NSE Nifty followed suit, tumbling 976.1 points, or 4.26 per cent, to 21,928.3. The steep drop marked one of the sharpest single-day declines in recent months and mirrored the deepening anxiety across global markets.
The immediate trigger for the rout was the flare-up in the ongoing trade standoff between Washington and Beijing. Over the weekend, the US announced sweeping tariff hikes on a range of Chinese goods, prompting a swift retaliatory response from China, which imposed duties on a host of American products. The tit-for-tat escalation has reignited fears of a full-scale trade war that could derail global economic recovery.
The uncertainty surrounding the impact of these measures has left investors worldwide on edge, with expectations of rising input costs, shrinking corporate margins, and a potential slowdown in global trade and consumption. Analysts say the heightened geopolitical tension is acting as a double blow to equity markets already grappling with inflationary pressures and monetary tightening in several economies.
Asian markets bore the brunt of the fallout, with Japan’s Nikkei tumbling 7 per cent, South Korea’s Kospi shedding 5 per cent, and Hong Kong’s Hang Seng nosediving by over 10.5 per cent. The spillover into India was swift and severe.
All 13 sectoral indices on the Bombay Stock Exchange were deep in the red. The Nifty Metal index led the declines with an 8 per cent fall, reflecting fears of disrupted supply chains and weaker industrial demand. The Nifty IT index was not far behind, dropping over 7 per cent due to its heavy dependence on US clients and uncertainty over cross-border trade.
Sectors such as auto, real estate, and oil and gas also suffered, each registering declines of over 5 per cent. Broader market indices fared even worse — the Nifty Midcap index lost 7.3 per cent, while the Smallcap index plunged a staggering 10 per cent, highlighting widespread selling pressure across market capitalisations.
Among the worst-hit stocks were Tata Steel, which slumped by nearly 10 per cent, followed by Tata Motors, Infosys, L&T, and Tech Mahindra, all of which saw losses between 6 and 8 per cent.
Market experts caution that unless there is a de-escalation in global trade tensions, volatility is likely to persist. With the spectre of a global recession looming, investor focus now shifts to how policymakers and central banks respond to contain the damage and restore stability.
While Indian fundamentals remain largely intact, the current wave of risk aversion suggests that global cues will continue to dominate market sentiment in the days ahead. For now, all eyes remain on Washington and Beijing — and whether diplomacy can avert a deeper crisis.
