The Indian stock market witnessed a sharp sell-off on Friday as benchmark indices plunged over one percent, rattled by reciprocal tariff announcements from US President Donald Trump. Global trade war fears escalated, leading to panic selling in key sectors such as IT, Pharma, and Metals.

The BSE Sensex tumbled 820.15 points (1.07%), hitting an intraday low of 75,475.21, while the NSE Nifty slipped 313.95 points (1.35%) to 22,936.15. The selling pressure intensified after the US announced reciprocal tariffs on 60 nations, including India, stoking fears of a prolonged trade war.

Key Factors Behind the Market Crash

1. Fears of a Global Trade War

The United States imposed a 26% tariff on Indian goods, along with a 10% baseline duty on imports from other nations. This led to a swift backlash:

• Canada retaliated with a 25% tariff on US vehicles.

• China warned of countermeasures and demanded the immediate withdrawal of duties.

• European markets tumbled on fears of similar actions from the EU.

According to V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, the market uncertainty will persist as retaliatory tariffs from China, Canada, and Europe are expected to escalate tensions, prolonging volatility and dampening global growth.

2. Negative Global Cues Intensify Selling Pressure

The ripple effect of Trump's tariffs was felt across global markets, leading to a sharp decline in major indices:

• US stocks suffered one of the biggest declines since 2020, with the S&P 500 plunging 4.9% and the Nasdaq 100 nosediving 5.5%. Nearly $2.5 trillion in market value was wiped out.

• Asian markets followed suit—Japan's Nikkei dropped 3%, and South Korea's KOSPI fell nearly 2%.

• Chinese and Hong Kong stock exchanges were closed for the Qingming Festival, preventing immediate market reaction.

3. Major Sectoral Drag: IT, Pharma, and Metal Stocks Fall

All 13 major sectoral indices on the NSE were trading in the red, with significant declines in:

• IT Stocks: The Nifty IT Index dropped over 2%, mirroring the weakness in US tech stocks. Coforge and Persistent Systems led the losses.

• Pharma Stocks: A sell-off was triggered after Trump hinted at potential tariffs on pharmaceutical products, warning of future policy changes.

• Metal Stocks: Concerns over rising trade barriers and supply chain disruptions added to the pressure on Tata Steel, Hindalco, and JSW Steel.

4. Relentless FII Selling Hits Investor Confidence

Foreign Institutional Investors (FIIs) continued their selling spree, exacerbating the market downturn:

• On Thursday, FIIs offloaded ₹2,806 crore worth of equities.

• Domestic Institutional Investors (DIIs) tried to offset some losses, purchasing ₹221.47 crore in stocks, but their efforts were not enough to stabilize the markets.

Stocks That Took the Biggest Hit

Among the worst-performing stocks were:

• Tata Motors, Tata Steel, Larsen & Toubro, Maruti Suzuki India, IndusInd Bank, Infosys, HCL Technologies, NTPC, Tech Mahindra, Sun Pharma, and Adani Ports.

Market Outlook: More Pain Ahead?

Market experts believe volatility will persist as:

• Trade war tensions escalate, with more retaliatory tariffs expected from China, Canada, and the EU.

• FII outflows continue, driven by global uncertainty and concerns over economic slowdown.

• Upcoming US economic data and interest rate decisions could influence market direction.

Analysts suggest investors should stay cautious, as the market could witness further corrections if trade tensions intensify. Defensive stocks such as FMCG and Utilities may offer relative stability during these volatile times.

Final Thoughts

The Black Friday market crash has shaken investor confidence, with global trade war fears, sectoral sell-offs, and FII outflows creating a perfect storm for equities. The coming days will be crucial in determining whether this is a short-term panic or the start of a prolonged bear phase. Investors should brace for heightened volatility and keep an eye on global developments.

The Upcoming IPOs in this week and coming weeks are Aten Papers & Foam.

 The Closed IPOs are  Infonative Solutions Limited, Spinaroo Commercial Limited,Retaggio Industries Limited.