Benchmarks-Plunge-Amid-Global-Trade-TensionsNSE Nifty50 dropped by 224 points or 0.91 per cent to touch 24,526

 

The Indian stock market witnessed a sharp fall on Monday, as benchmark indices plunged after opening, following weak cues from Asian markets. The sentiment was impacted by rising global trade tensions and the imposition of fresh tariffs by the United States. The pressure from global developments, coupled with local uncertainties, weighed heavily on investors. 

 

Sensex and Nifty Record Sharp Fall 

 

The BSE Sensex fell as much as 796 points or 0.98 per cent in intraday trading, hitting a low of 80,654. Meanwhile, the NSE Nifty50 dropped by 224 points or 0.91 per cent to touch 24,526. These figures marked the worst intraday fall for the indices since May 27 this year. 

Despite the weakness in large-cap indices, the broader markets showed relative resilience. The Nifty MidCap index ended slightly higher by 0.08 per cent, while the Nifty SmallCap index dipped marginally by 0.01 per cent. This outperformance indicated selective buying interest in mid and small-sized companies, even as large-cap stocks bore the brunt of the sell-off. 

 

Sectoral Indices Reflect Mixed Trends 

 

Most sectoral indices traded in the red throughout the day, with notable pressure observed in the IT and metal sectors. The Nifty IT index declined by over 1 per cent, while the Nifty Metal index slipped 0.9 per cent, mainly due to global tariff concerns. Stocks in these sectors reacted sharply to the news of higher steel and aluminium tariffs announced by the US government. 

On the contrary, a few segments bucked the trend. Nifty PSU Bank, FMCG, and Realty indices managed to stay in the green. The Nifty PSU Bank index rose 1.16 per cent, providing some cushion to the otherwise bearish mood. The defensive nature of FMCG stocks and the performance of certain realty counters helped limit the losses. 

 

Market Breadth Favors Sellers 

 

Despite some sectoral strength, the overall market breadth remained negative. On the Bombay Stock Exchange, 1,336 stocks advanced, 1,779 declined, and 187 remained unchanged. The dominance of declining stocks indicated the broad-based weakness across the market. The fear gauge, India VIX, jumped by 8 per cent during early trade, reflecting increased volatility and risk aversion among investors. 

 

Global Factors Drag Market Sentiment 

 

The primary driver of the negative sentiment was the escalation in trade tensions after the US President Donald Trump announced that tariffs on steel and aluminium would be increased to 50 per cent, doubling the previous levels. This unexpected move sent shockwaves through global financial markets, especially those in Asia. 

Japan’s Nikkei index declined 1.5 per cent, while the Hang Seng dropped by over 2 per cent. South Korea and Australia’s indices also fell by 0.5 per cent. Futures in the US indicated continued weakness, with the S&P 500 down by 0.2 per cent and Nasdaq futures slipping 0.3 per cent. These global trends contributed significantly to the negative start and continued weakness in Indian equity benchmarks. 

Adding to the tension, the European Commission announced it was ready to retaliate against the US tariff hikes, signaling the possibility of a prolonged trade dispute. This increased the uncertainty surrounding global trade and further dampened investor confidence across world markets. 

 

Domestic Worries Add to Pressure 

 

Apart from global concerns, several domestic issues contributed to the bearish outlook. The rise in COVID-19 cases in parts of the country revived fears of potential restrictions, although there have been no official announcements regarding lockdowns or curbs. The uncertainty around the economic impact of a possible surge in infections weighed on sentiment. 

Additionally, foreign institutional investors (FIIs) were seen selling in the equity markets, putting pressure on key stocks. Geopolitical tensions involving Russia and Ukraine also played a part in spooking investors, along with nervousness ahead of the Reserve Bank of India’s upcoming monetary policy decision. Market participants were cautious, awaiting cues from the central bank regarding interest rates and inflation outlook. 

 

Major Drag on Index Heavyweights 

 

Several index heavyweights contributed to the sharp fall in the benchmarks. HDFC Bank, L&T, Tata Steel, HCL Technologies, Reliance Industries, Infosys, Tech Mahindra, and Bajaj Finance were among the top losers, with losses ranging up to 1.7 per cent. These companies have significant weight in both the Sensex and the Nifty, and their decline added to the index-level fall. 

Bharti Airtel, Kotak Mahindra Bank, Axis Bank, and Tata Motors also registered losses. However, a few stocks such as Hindustan Unilever (HUL), Adani Ports, IndusInd Bank, Nestle India, and State Bank of India (SBI) showed resilience and limited the overall decline in benchmarks. 

 

Buzzing Stocks and Corporate Developments 

 

In individual stock-specific action, Niva Bupa Health Insurance witnessed a sharp 10 per cent fall after nearly 7 per cent of its equity changed hands. Reports indicated that Fettle Tone LLP and the company’s MD and CEO Krishnan Ramachandran planned to sell a combined 7.2 per cent stake through block deals, leading to heavy selling pressure. 

Metal sector stocks like Welspun Corp, Vedanta, JSW Steel, Lloyds, NMDC, SAIL, and Tata Steel were under significant stress due to the concerns arising from the US steel tariff hikes. The sector has high exposure to global trade dynamics, and any disruptions due to tariffs typically result in immediate stock price reactions. 

 

IPO Updates 

 

On the primary market front, Aegis Vopak IPO and Schloss Bangalore IPO were listed on the stock exchanges. The performance of these IPOs on debut remained under focus amid the volatile broader market conditions. 

Allotments for several new issues were also underway, including Scoda Tubes IPO (Mainline), N R Vandana IPO (SME), and Neptune Petrochemicals IPO (SME). Despite the market’s overall weakness, the IPO segment continued to see activity, reflecting continued interest from retail and institutional investors. 

 

Outlook Remains Cautious 

 

Market experts suggest that the current structure points towards a continued consolidation phase. According to VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the combination of global uncertainties, especially the evolving tariff scenario, and domestic caution ahead of the RBI’s monetary policy meeting, will likely keep the markets under pressure. 

The possibility of a breakout rally remains limited unless there is clarity and relief on the trade front and improvement in domestic triggers. Until then, volatility and sector-specific moves are expected to dominate trading sessions. 

The Indian stock market had a turbulent start to the week, driven by renewed global trade tensions and local headwinds. With the Sensex and Nifty registering their steepest fall in nearly a week, investors are bracing for continued volatility. Broader markets, IPO activity, and select defensive sectors provided some relief, but the overall trend reflected caution. The coming days, especially the outcome of the RBI’s policy meeting, will be crucial in shaping short-term market direction.