The Indian stock market plunged sharply on Monday as global fears of a trade war reached a fever pitch. US President Donald Trump’s announcement of sweeping tariffs on all trade partners sent global investors into panic.
On opening, the Sensex fell by 3,939.68 points to 71,425.01, and the Nifty declined by 1,160.8 points to 21,743.65 — a near 5% decline. This was the worst opening for the Indian bourse since the COVID-19 pandemic.
IT and Metal Stocks Among the Worst Hit
IT and metal shares were affected the most. Tata Steel plunged over 8%, and Tata Motors declined by over 7%. Infosys, HCL Technologies, Tech Mahindra, TCS, L&T, and Reliance Industries also saw their shares plummet.
The US market is these companies’ biggest dependence. The fresh tariffs might affect their exports, revenue, and margin.
Global Sell-Off Spills Over to Indian Markets
Markets everywhere else trended the same way. The S&P 500 fell by 6%, and the Dow Jones lost more than 2,000 points. In Asia, Japan’s Nikkei fell by 8%, and China’s primary index fell by 10%.
Trump’s announcement of tariffs instilled fear of a global trade war. Nations such as China, Canada, and Mexico retaliated with retaliatory tariff plans. China, for example, will charge 34% tariffs on all US imports from April 10.
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Recession and Inflation Fears Loom
The trade tensions have generated fear of higher inflation and declining economic growth. These fears have put pressure on world markets, including the Indian market.
“Higher tariffs from both the US and China will increase costs and decelerate growth,” said Vikas Jain, Reliance Securities’ Head of Research.
Corporate Earnings and Market Outlook
The earnings season will get underway shortly, with large US banks releasing results this week. Most companies might hold back from providing forward guidance due to economic uncertainty.
Goldman Sachs analysts cautioned that firms might experience decreasing profit margins.
“We see fewer firms providing guidance. Firms will have to either increase prices or absorb a margin hit.”
Bear Market Signals and Investor Sentiment
The Nasdaq index was officially in a bear market last week. Meanwhile, oil and other commodities prices fell as uncertainty in the market mounted.
As more than 87% of US companies will be announcing earnings between April 11 and May 9, volatility in the market will not abate anytime soon. The Indian stock market will continue to be under pressure in the next few weeks.
