Sensex drops 762 points, Nifty sinks 212 amid Trump tariff threat

The Indian stock markets opened sharply lower on Monday as benchmark indices Sensex and Nifty registered significant declines amid renewed global trade concerns. The fall followed former US President Donald Trump's announcement to double import tariffs on steel and aluminium starting June 4, sparking fears of fresh trade tensions worldwide.

The BSE's 30-share Sensex plummeted 762 point 24 points to close at 80688 point 77, while the NSE Nifty 50 index fell by 212 point 25 points to settle at 24538 point 45. The broad sell-off across key sectors indicates a sharp shift in investor sentiment, largely due to escalating trade uncertainty.

Global trade concerns trigger market slide

Donald Trump's decision to raise tariffs on imported steel and aluminium to 50 percent reignited concerns of a new global trade war. The move has the potential to disrupt global supply chains and affect key export-driven sectors in emerging markets like India. The announcement sent shockwaves across Asian markets, with Indian indices reacting sharply to the development.

Market participants were quick to cut exposure to sectors that are heavily reliant on global trade, particularly metals and IT, both of which saw substantial losses during the session.

Top laggards pull down the indices

Several heavyweight stocks contributed to the sharp fall in the indices. Among the biggest laggards on the Sensex were:

• HDFC Bank

• Reliance Industries

• Infosys

• Tata Consultancy Services

• Tata Steel

• Tech Mahindra

• Larsen and Toubro

• HCL Technologies

• Titan

• Bajaj Finance

These stocks dragged the benchmark indices lower as investors reacted to the potential implications of rising tariffs on trade, profits and economic stability.

Sectoral impact: Metal and IT stocks decline

The Nifty Metal index fell by 1 point 4 percent, the steepest among sectoral indices, reflecting the vulnerability of metal companies to the US tariff hike. Companies in the steel and aluminium sectors are expected to face a direct impact on exports, pushing traders to exit positions.

IT stocks also came under pressure, with the Nifty IT index declining by 1 point 25 percent. Since a large portion of Indian IT firms' revenue is derived from US clients, any escalation in trade tensions or regulatory uncertainty tends to impact the sector negatively.

Foreign flows and investor sentiment turn cautious

The recent positive momentum in the Indian market, driven by foreign institutional investor buying, paused amid the current global developments. FIIs were seen reducing exposure, while domestic institutional investors also booked profits after last week's strong gains.

Investor sentiment turned risk-averse as traders opted to adopt a wait-and-watch stance. The heightened uncertainty regarding global trade, especially with the US, has added a layer of caution in an already volatile market environment.

Broader concerns and future outlook

The market reaction highlights the broader concerns over the global economic outlook and its impact on Indian corporates. Analysts believe that if the tariff hikes are implemented, they could lead to higher input costs, lower margins and possible retaliatory measures from other nations, all of which can slow economic growth.

In addition to trade-related issues, investors are also monitoring key domestic and global cues such as:

• US Federal Reserve’s stance on interest rates

• Movement of crude oil prices

• Currency fluctuations and dollar strength

• Political developments ahead of the US elections

• Domestic macroeconomic data releases

These factors will play a critical role in shaping short to medium-term market direction.

What should investors do now

Market experts advise caution in the near term. Traders should avoid high-beta stocks and focus on sectors with strong fundamentals and domestic demand resilience. Defensive sectors like FMCG and pharma may provide safer options amid ongoing global volatility.

Long-term investors are being advised to use any dips as an opportunity to accumulate quality stocks with strong earnings visibility. However, short-term traders should expect heightened volatility and sharp swings in either direction.

Conclusion

Monday’s steep fall in both Sensex and Nifty was a direct response to global trade concerns reignited by Donald Trump's proposed tariff hikes on metals. The decline reflects the sensitive nature of Indian equities to global policy shifts and highlights the need for cautious positioning.

As the world watches how the US trade move unfolds, the Indian market is likely to remain volatile in the coming days. Investors will need to track global headlines closely while keeping an eye on domestic economic indicators and corporate earnings to navigate the uncertain terrain ahead

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