Sensex, Nifty Plunge as US-China Trade War Fears Grip Markets
Indian equity benchmarks Sensex and Nifty 50 tumbled sharply on Thursday, erasing significant investor wealth as fears of a renewed global trade war triggered a widespread sell-off. The market decline mirrored a global rout following fresh tariff announcements by the US and China.
Key Market Snapshot
- Sensex: Down 700.95 points (0.93%) at 74,476.60
- Nifty 50: Down 197.95 points (0.86%) at 22,657.80
- Broader Market: BSE Midcap fell 0.84%; Smallcap down 0.73%
- Rupee: Weakened 9 paise to 83.55 against the US dollar.
Sectoral and Stock Performance
All major sectoral indices traded in negative territory. Nifty Bank and Nifty Financial Services fell 0.75% and 0.86%, respectively. Declines were also seen in Auto, FMCG, IT, Metal, Pharma, Realty, and Oil & Gas indices.
On the Sensex, only Sun Pharma, Nestle India, and Power Grid managed gains. Major laggards included Tata Steel, JSW Steel, Tata Motors, and banking heavyweights like Axis Bank, ICICI Bank, and HDFC Bank. The Nifty 50 mirrored this trend, with Tata Steel, JSW Steel, Tata Motors, Hindalco, and Axis Bank as the top losers.
Expert View: Trade War is the Major Headwind
Analysts squarely blamed escalating US-China trade tensions for the market fall.
“The escalating trade war between the US and China is the major headwind for markets now. The US has announced 100% tariffs on Chinese EVs and increased tariffs on several other items like batteries, solar cells, steel, and aluminium. China has threatened retaliation. This has the potential to impact global growth and, therefore, is negative for equity markets,” said VK Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
He noted that the sharp 411-point crash in the US Dow Jones index added to the negative sentiment. Vijayakumar advised caution, stating, “Since the Indian market is highly valued, negative news can trigger corrections. Investors should be cautious and wait for the dust to settle.”
Global and Institutional Context
The sell-off was global. Asian markets like Hong Kong’s Hang Seng (down 1.59%) and Japan’s Nikkei fell. This followed a weak closing on Wall Street where the Dow, S&P 500, and Nasdaq all declined sharply.
Institutional activity showed a stark divergence: Foreign Institutional Investors (FIIs) were heavy net sellers, offloading shares worth ₹6,669.10 crore on Wednesday. In contrast, Domestic Institutional Investors (DIIs) provided some cushion with net purchases of ₹5,074.46 crore.
