Mumbai: Amid fears of a global trade war growing after US President Donald Trump announced tariffs on all countries, the Indian markets took a major hit on Monday during the opening trade. The Sensex, Nifty crashed after a market rout on Wall Street and other major Asian markets, including Japan, Singapore and China.
Both the Sensex and Nifty were down nearly 5% during the opening bell on Monday. Sensex crashed 3,939.68 points to 71,425.01 in early trade. Nifty had tumbled 1,160.8 points to 21,743.65.
Dalal Street plunged into deep red on Monday, with Sensex and Nifty hitting 10-month lows as Trump’s tariff shock sparked panic selling across sectors. According to reports, Rs 19 lakh crore was wiped out of the market wealth.
Some of the worst-hit shares were those of IT companies. These companies earn a significant revenue from the US. Tata Steel dropped by over 8%, followed by Tata Motors which fell by over 7%. HCL Technologies, Tech Mahindra, Infosys, Larsen & Toubro, Tata Consultancy Services and Reliance Industries were other major laggards. According to reports, this has been the worst opening in Indian markets since pandemic.
Markets across the globe have been nosediving. This comes at a time when Donald Trump announced tariffs on all trade partners of the US. The announcement has also raised fears of a global trade war. Many countries like China, Canada and Mexico already planning retaliatory moves.
“Both China and Japan index declined by 10% and 8%, respectively. This escalates the stakes in the ongoing trade war and raises concerns about a potential global recession that could affect everyone. On Friday, the US S&P 500 dropped by 6% and the Dow Jones fell more than 2,000 points, marking its worst week since the COVID-19 crisis. This came after China announced it would impose reciprocal 34% tariffs on all US imports starting April 10,” Vikas Jain, Head of Research at Reliance Securities, told PTI.
The sharp increase in tariffs by both the US and China could lead to higher inflation. This may slow down global growth, experts fear. Experts also warned that rising tariff rates would force many companies to either raise prices or accept lower profit margins.
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