‘Black Monday’ roundup: Sensex, Nifty plunge 3 per cent as Trump tariffs, trade war fears roil global markets
Stock markets tanked on Monday with the benchmark Sensex and Nifty50 plunging 3 per cent, tracking huge losses across global markets as investors, worried over the impact US President Donald Trump's reciprocal tariffs would have on the economy, continue to dump equities.
Markets sank on Friday and continued their downward spiral on Monday. The BSE Sensex closed 2,227 points or 3 per cent lower at 73,137.90 points and the 50-share NSE Nifty declined 743 points or 3.2 per cent to end the session at 22,161.60 level.
Across Asia, the correction was significantly steeper on Monday. Japan's Nikkei 225 index, for instance, plunged 7.8 per cent and the Hang Seng in Hong Kong tumbled over 13 per cent. The Shanghai Composite Index was also down more than 7 per cent. European markets too traded sharply lower with FTSE 100 down 3.7 per cent, France's CAC 40 down 4.5 per cent and Germany's DAX down 4.4 per cent.
"The selloff is sentiment-driven, exacerbated by fears of a prolonged trade war and global liquidity tightening," said Jaspreet Singh Arora, CIO of Equentis Wealth Advisory Services.
Last week, President Trump announced reciprocal tariffs on as many as 60 countries. Speaking over the weekend following the market meltdown on Friday, Reuters quoted Trump saying investors would have to just take their medicine and that he wouldn't do any deal with China until the trade deficit issue was sorted. That weakened sentiments further.
JP Morgan has said that chances of a US and a global recession are now 60 per cent, compared with 40 per cent earlier.
Trump slapped China with 34 per cent import tariffs last week, on top of the 20 per cent tariffs announced earlier. Not one to sit quietly, China retaliated with tariffs on US imports.
"China's imposition of a 34 per cent tax on all US imports in retaliation to recent tariff hikes by the Trump administration has further intensified concerns over a prolonged trade war," said Sundar Kewat, technical and derivatives analyst at Ashika Stock Broking.
Barring Hindustan Unilever, all the remaining stocks that compose the 30-share Sensex ended in the red. IT companies continued to bleed on worries that US corporations could cut spending amid the tariff-led uncertainties, in turn delaying the recovery of software exporters.
Tata Motors shares slumped after its British luxury unit Jaguar Land Rover said it would pause shipments to the US temporarily as it worked to address new trading terms with its US partners.
Banks, metals, oil and gas, and capital goods companies were among the other major losers on Monday. Oil prices have fallen in the last few days, as Trump's tariffs have cast a shadow on the global economy. With crude oil prices touching a 4-year low, the Indian government raised the excise duty on petrol and diesel on Monday by ₹2 a litre. Retail fuel prices are unlikely to change, however, as the hike will offset the decline in crude prices.
Compared with the large caps, the mid and small caps saw deeper cuts. The BSE smallcap index slumped over 4 per cent, and midcaps slipped 3.5 per cent.
Ketan Vikram, head of sales at Almondz Institutional Equities, felt domestic markets could consolidate at these levels as tariffs India would be facing would be lower compared with China and Vietnam, among others.
"With recent corrections, valuations have become attractive. But, due to global uncertainty, we expect Indian markets to remain volatile in April," he said.
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