Indian stock markets opened with a steep fall on Monday, reacting to escalating global trade tensions after former US President Donald Trump announced sweeping tariffs on all nations. This triggered panic selling across global markets, including Wall Street, Japan, Singapore, and China, which bled heavily before India followed suit.
At the opening bell, the Sensex tumbled by 3,939.68 points to hit 71,425.01, while the Nifty dropped sharply by 1,160.8 points to 21,743.65, marking an almost 5% decline. Technology and export-oriented companies took the biggest hit due to their high revenue exposure to the US. Tata Steel fell more than 8%, followed by Tata Motors with over a 7% decline. HCL Tech, Infosys, Tech Mahindra, L&T, TCS, and Reliance Industries were also among the major laggards.
This has turned out to be the worst market opening in India since the COVID-19 outbreak.
What’s causing the market crash
Global markets have been under heavy selling pressure following Trump’s tariff announcement targeting all trading partners of the US. The move sparked concerns over a full-blown global trade war. Countries like China, Canada, and Mexico have already announced countermeasures, heightening uncertainty.
Investors are growing more concerned that the potential for a global recession now outweighs inflation concerns driven by rising tariffs. “China and Japan’s indices have dropped by 10% and 8%, respectively, increasing the chances of a deeper trade war. This could drag the global economy toward recession,” said Vikas Jain, Head of Research at Reliance Securities.
Last Friday, US markets saw one of their worst sessions since the pandemic — the S&P 500 fell 6%, while the Dow Jones lost over 2,000 points. China also declared a retaliatory tariff hike of 34% on all US imports starting April 10.
Such aggressive tariff increases are likely to push up prices globally, slow economic growth, and worsen trade relationships. US inflation data expected this week may show a 0.3% increase for March, but analysts believe prices could soon spike further — affecting essentials like food and automobiles.
Rising input costs are set to eat into company profits as Q1 earnings season begins. Around 87% of US companies are scheduled to report between April 11 and May 9. “We expect fewer companies to issue forward guidance this season,” Goldman Sachs analysts noted.
They further warned, “Higher tariff rates could leave companies with a choice — raise product prices or accept tighter margins. Either way, we foresee negative adjustments to profit margin expectations in the coming quarters.”
US Federal Reserve Chair Jerome Powell also remarked that Trump’s tariff measures were “larger than expected,” adding that inflation and growth would both likely be impacted, leaving the economic outlook uncertain.
The Nasdaq officially slipped into bear market territory last Friday, while oil and commodity prices also crashed amid the global sell-off triggered by the US tariff announcement.
