Indian benchmarks post worst session in three weeks as US tariff concerns spook investors
India’s benchmark indexes declined on Tuesday, posting their worst session in three weeks, dragged down by fears over the U.S. imposing reciprocal trade tariffs.
The NSE Nifty 50 closed 1.32% lower at 23,071.8, while the BSE Sensex fell 1.32% to 76,293.6. The blue-chips fell for the fifth straight session and posted their biggest single-day percentage drop since January 21.
The indexes have lost about 3% in the five sessions.
The benchmarks are trading about 12% lower from their record-high levels hit on September 27, 2024, while the smallcap and midcap indexes are inchingtowards bear market territory - a 20% drop from all-time highs hit on December 12 and September 24, respectively.
The more domestically-focussed small and midcaps indexes tumbled 3.5% and 3% each on the day, taking the combined drop from their record highs to 18.5% and 16.5%, respectively.
Small and midcaps could continue to see further selling pressure as earnings growth has not justified expensive valuations, according to analysts.
Meanwhile, U.S. President Donald Trump on Monday raised tariffs on steel and aluminium imports to 25% and said he would announce plans to impose reciprocal levies on several countries in the next two days.
Indian shares seen opening marginally higher
India will be among the most impacted by reciprocal tariffs due to its pronounced tariff differentials, multiple brokerages said.
Trump’s tariff threats continue to hurt market sentiment, triggering selling pressure, said Vinod Nair, head of research at Geojit Financial Services.
Federal Reserve Chair Jerome Powell’s testimony later in the day will also be closely assessed for commentary on U.S. tariffs and inflation.
Beside tariff worries, slowing domestic corporate earnings have also dented investor sentiment.
Among individual stocks, Royal Enfield motorcycle maker Eicher Motors shed 7% and was the top percentage loser on the Nifty after missing quarterly profit and margin estimates.