Dalal Street Bleeds: Indian equity markets witnessed a massive sell-off on Monday, with benchmark indices Sensex and Nifty 50 crashing around 3% each, mirroring the global market turmoil triggered by rising trade tensions. The BSE Sensex nosedived 2.95% or 2,218.85 points to close at 73,137.90, while the NSE Nifty 50 plunged 3.24% or 743.40 points to settle at 22,161.60.
Barring Hindustan Unilever (HUL) and Zomato, all other Nifty 50 stocks ended in the red, with metal and IT counters suffering the most. Tata Steel, JSW Steel, and Trent emerged as the top laggards, dragging the market sharply lower. On the broader front, the Nifty Midcap 100 and Nifty Smallcap 100 indices also took a beating, falling 3.63% and 3.88% respectively — though both showed some recovery from intraday lows.
Global Trade War Sparks Panic
The massive downturn came amid rising fears of a global trade war, following U.S. President Donald Trump’s decision to impose retaliatory tariffs on over 180 countries. The move has not only reignited tensions with China but has also sparked fears of a global economic slowdown. The ripple effects were seen across global markets, with Japan’s Nikkei crashing 7.8%, South Korea’s Kospi falling 5%, and Europe’s Stoxx 600 slipping 5.3%. Wall Street also witnessed a meltdown last week, with nearly $6 trillion wiped off market valuations.
Fear Gauge Surges, Volatility Ahead
India VIX, the volatility index, spiked 66% on Monday — signaling turbulent times ahead for investors. Market analysts have advised retail investors to avoid panic selling and continue with their SIPs (Systematic Investment Plans), while refraining from large lump-sum investments until volatility subsides.
Sectoral Bloodbath: Metals, IT Hit 52-Week Lows
All key sectoral indices ended in the red, with Nifty Metal emerging as the biggest loser, crashing 6.75%. Nifty IT also fell sharply, hitting 52-week lows as fears of a U.S. recession weighed heavily on export-heavy tech stocks. Nifty FMCG was the most resilient, declining just 1.10% amid the carnage.
Expert View: More Pain or Bottoming Out?
Vinod Nair, Head of Research at Geojit Financial Services, noted, “The market tumbled on worries over high U.S. tariffs and countermeasures from other countries. A global trade war may lead to higher inflation and slower growth, pushing the U.S. economy toward a possible recession. While the direct impact on India may be limited, cautious investing is advised in the current scenario.”
Echoing similar sentiments, Bino Pathiparampil, Head of Research at Elara Capital, said, “Markets are still digesting the implications of the global tariff war. It’s unclear who the eventual winners and losers will be, increasing risk premiums. We expect the markets to stabilise over the coming weeks as the situation evolves.”
What Lies Ahead?
While the worst may not be over yet, analysts suggest focusing on domestic consumption-driven sectors and avoiding overexposure to global-facing sectors like IT and metals for now. Until the global trade dynamics become clearer, markets are expected to remain highly volatile.
