Indian shares fell sharply on Monday as concerns over a trade war and growing recession fears in the US continued to fuel a global stock market rout.
The Nifty 50 and the BSE Sensex trimmed some losses from the pre-open trade, declining 3.96% to 21,995.3 and 3.71% to 72,546.64, respectively, as of 10:01 a.m. IST.
Both benchmarks lost about 5% at the open, the steepest drop in terms of percentage since March 2020. Other Asian markets slumped, with the MSCI Asia ex-Japan index losing 6.8%.
Japan’s Nikkei 225 dropped 6.5%. President Donald Trump’s new tariffs are “larger than expected” and the economic impact on inflation and growth will be likely, Federal Reserve Chair Jerome Powell said on Friday, flagging an uncertain outlook for the US economy.
The Nasdaq confirmed a bear market on Friday as oil prices and other commodities plunged amid a massive global market decline following Trump’s announcement of sweeping tariffs on Wednesday.
The Nifty volatility index rose the most in 10 years to 20.88.
“The sell-off in domestic equities today has to do with investors panicking that the US tariffs could cause collateral damage to global economy and India could bear the brunt,” said Gaurav Dua, senior vice president of capital markets strategy at Mirae Asset Sharekhan.
Investor confidence has plummeted after the reciprocal tariffs and retaliatory measures from China, which spurred fears of an escalation in the global trade war, said analysts.
Barclays estimated a 30-basis point downside risk to India’s fiscal year 2026 GDP growth, while Goldman Sachs forecast a 2%-3% hit on earnings growth over the next couple of years due to the tariffs.
All 13 major sectors logged losses on the day.
IT companies, which earn a significant share of their revenue from the US lost 5.3%.
Metals dropped 7%, while heavyweight financials shed 3.5%.
The broader small-caps and mid-caps fell 5.5% and 4.6%, respectively.
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