Trump’s “Cure” Turns Poison for Global Markets
Panic Selling Grips India
Markets across the globe, including India, plunged on Monday after U.S. President Donald Trump’s new tariff policy and China’s retaliatory measures.
Trump had previously called these tariffs a “cure” for America’s trade imbalance, but now, the side effects are showing in the form of fears of a global recession.
India’s BSE Sensex and NSE Nifty dropped nearly 5% in pre-opening trades, and while there was a slight recovery post-market opening, both indices continued to trade with over 3% losses.
The result? A whopping ₹19 lakh crore of investor wealth was wiped out in just minutes.
Global Shockwaves
Asian Markets Follow Suit
Major Asian markets also tanked:
Hang Seng (Hong Kong) dropped 11%
Nikkei 225 (Japan) fell 7%
Shanghai Composite (China) slid over 6%
KOSPI (South Korea) dipped 5%
This came after the U.S. markets tumbled on Friday:
S&P 500: -5.97%
NASDAQ: -5.82%
Dow Jones: -5.50%
China’s blue-chip index dropped by 7%, while Taiwan’s stock market plummeted by 10%, marking its steepest single-day fall in years.
Sector-Wise Bloodbath in India
IT, Metals, Auto Among Worst Hit
The crash hit almost every major sector:
IT stocks such as HCL Tech, Infosys, TCS, and Tech Mahindra recorded steep losses.
Metals and Auto stocks took a beating:
Tata Steel fell over 8%
Tata Motors dropped 10%
Reliance Industries and L&T also saw significant dips.
All 30 Sensex stocks were in the red, signaling widespread panic.
Why Did This Happen?
Recession Fears on the Rise
The sudden hike in tariffs has raised investor fears that:
Global input costs will rise
Demand will weaken
Supply chains will be disrupted
Recession risks will increase
Brent Crude also slipped 2.74%, trading at $63.78 per barrel, indicating shrinking global demand.
Foreign Investors Exit
FIIs Dump Indian Stocks
Foreign Institutional Investors (FIIs) sold off ₹3,484 crore worth of Indian stocks last Friday alone.
Last week, the Sensex dropped 2,050 points (2.64%) and the Nifty slid 614 points (2.61%).
GDP and Job Market Concerns
JP Morgan Warns of Economic Dip
According to JP Morgan:
Trump’s tariffs could shrink U.S. GDP by 0.3% this year
Unemployment may also rise
India’s GDP could face up to a 0.5% contraction if the trade war continues.
Market analysts from Kotak Institutional Equities noted that while the tariffs might be temporary, they’re causing long-term uncertainty for investors and corporations.
What Should Investors Do Now?
Stay Calm, Choose Wisely
Market experts recommend a “wait and watch” approach for now.
Avoid:
Export-heavy sectors like IT, Auto, Auto Ancillary, Metals, and Chemicals.
Consider:
Oil marketing companies
Aviation
Paint industries, which benefit from lower crude oil prices
Once the market begins stabilizing, Banking and NBFC stocks are expected to lead the recovery.
Outlook: What Happens Next?
The End of Tariff War Is Uncertain
Analysts say that while the trade war has begun, it’s unclear how or when it will end.
Each country’s response, the nature of future negotiations, and global economic indicators will dictate how soon markets can recover.
India, being part of the global supply chain, cannot remain immune from the ripple effects. However, if handled wisely, smart investors may find golden opportunities even amid this turbulence.
