Donald Trump infused bloodbath drove Indian markets to a 9-month low today. Touted as Black Monday the day witnessed tariffs setting off a sell-off in equities globally, and India was no exception.
In the early trade, the Sensex dropped 5 per cent lower at one point, but as the day progressed, it pared some of the losses and closed 3 per cent lower. The Sensex closed at 73,137.90 points, down 2,226 points. Similarly, the Nifty also slipped 3 per cent to close at 22,161.60 points.
Adding to the bearish sentiment, India VIX spiked by approximately 66%, hitting multi-month highs and signalling the potential for heightened volatility ahead—typically a negative indicator for market direction. On the sectoral front, metals, realty, and auto stocks were among the hardest hit, while broader indices also recorded losses in the range of 3% to 3.5%.
“The market turbulence was further aggravated by China’s announcement of retaliatory tariffs on U.S. goods, raising concerns over a possible escalation into a broader trade war. This development has sparked fears of global economic disruptions, and the impact is being felt across international markets—a trend that could persist given the current uncertainty,” Ajit Mishra – SVP, Research, Religare Broking stated.
The domestic key equity indices recovered on closing even as global markets nosedived following Trump’s tariff tornado. On a relative basis, the economic risks to India are among the lowest, Axis Bank’s Chief Economist Neelkanth Mishra told NDTV Profit. The bigger concern is the impact on Indian markets as they are more integrated with the world than the economy is, he said.
On Monday, the Nifty 50 plunged 743 points or 3.24% to settle at 22,161.60, while the BSE Sensex recovered from a low of 71,425.01 to close with a loss of 2,226.79 points or 2.95% to finish at 73,137.90.
The Nifty Metal was the worst hit among the sectoral indices, falling 6.42% to 7,874.20 level in Monday’s trade. The index is down 10% in the last two sessions.
It was followed by Nifty Realty declined 5.45% to 778.20 level. The sell-off in Nifty IT continued for the third session as well, dropping 4.3% in the last three trading days.
The Nifty Bank fell 1,643 points or 3.19% to close at 49,860.10, breaking the key support of 50,000. The BSE Midcap collapsed by 3.46% to close at 39,107.96.
Sectoral Index
In the broader markets, small- and mid-cap stocks also closed on a lower note following the overall market sentiments. The volatility index India VIX shot up significantly by 66.12% to the 22.85 level.
The overall market breadth remained in favour of bears as out of 3,036 stocks traded, 2,640 declined and a mere 327 advanced. Trent (14.7%) was the major loser in the Nifty 50, followed by JSW Steel (7.5%), Tata Steel (7.26%), Hindalco (5.92%), and Tata Motors (5.34%). Meanwhile, Hindustan Unilever, Zomato, and Apollo Hospitals were the only stocks ending in the green.
“From the current level (Nifty was around 23200) expected 5-6% correction (around 22,000); that’s because of PE contraction. If EPS contraction starts then more than 10% correction in Nifty and a below (or around) 20,000 level is triggered so watch this and upcoming earnings carefully. In a challenging environment, we have observed earnings cut by up to 30% and to date, we have seen earnings cut by 7%/ 2% for CY25 and CY26 (Bloomberg) from Sep-24,” said Manish Jain, Chief Strategy Officer & Director at Mirae Asset Capital Markets.
“The market tumbled as the carnage over high US tariffs and the retaliation by other countries may kickstart a trade war. Sectors like IT and metals have underperformed relative to the broader market due to the risk of high inflation with slower growth that may result in a potential recession in the US,” said Vinod Nair, Head of Research at Geojit Investments.
“Though the overall impact on India may be limited when compared with other countries, investors are advised to play cautiously during this fray,” added Nair.
Asian Markets deep in red
In Asian markets, Hong Kong’s Hang Seng index tanked more than 13 per cent, Tokyo’s Nikkei 225 plunged nearly 8 per cent, Shanghai SSE Composite index dropped over 7 per cent and South Korea’s Kospi sank over 5 per cent.European markets too came under heavy selling pressure and were trading with up to 6 per cent decline.US markets ended sharply lower on Friday. The S&P 500 dropped 5.97 per cent, Nasdaq composite slumped 5.82 per cent and the Dow tumbled 5.50 per cent on Friday.