Mumbai— Indian stock markets suffered a sharp sell-off on Monday, mirroring a global downturn, as benchmark indices recorded their steepest single-day decline since June 4 of last year—the day Lok Sabha election results were announced.
Despite the steep fall, a modest recovery in the final hour of trading helped the Nifty close slightly above the 22,100 level, easing some of the day’s earlier losses.
The Sensex plummeted 2,226.79 points, or 2.95%, to end at 73,137.90. During the session, it swung between an intraday high of 73,284.24 and a low of 71,425.01. Investors collectively lost over ₹13.5 lakh crore by the close of trade.
Similarly, the Nifty 50 dropped 742.85 points, or 3.24%, to settle at 22,161.60. Tata Steel was the biggest loser on both exchanges, falling more than 7%.
The decline followed the steepest drop in Asian markets in 14 years, sparked by a major sell-off on Wall Street.
Market sentiment turned sour after U.S. President Donald Trump announced significant tariffs, which prompted swift retaliatory measures from China. The escalating tensions between the world’s two largest economies have reignited fears of a full-scale trade war, with potential to trigger a global recession.
“The market nosedived as fears of a trade war intensified following high U.S. tariffs and retaliation from other nations,” said Vinod Nair of Geojit Financial Services.
While the overall impact on India may be relatively limited compared to other countries, Nair advised investors to remain cautious.
“Focus should remain on pure domestic plays, which are likely to rebound more steadily once the volatility subsides,” he added.
Broader markets also bore the brunt of the sell-off, with the Nifty Midcap100 and Smallcap100 indices both closing over 3% lower.
Among sectors, metal and real estate stocks took the biggest hit. The Nifty Metal index sank 6.75%, while the Nifty Realty index fell 5.69%. Other sectors including IT, banking, auto, and financial services posted losses of up to 4%.
Even a stronger-than-expected U.S. jobs report, which typically boosts global investor sentiment, failed to calm nerves as trade tensions dominated the narrative.
Sundar Kewat of Ashika Institutional Equity noted that the downturn was driven largely by growing global uncertainties.
“Weak cues from Wall Street on Friday extended into Asian and Indian markets,” he said. “Investor confidence has been shaken by rising fears of a global recession, fueled by heightened trade tensions.”
Meanwhile, the Indian rupee weakened against the U.S. dollar, closing 61 paise lower at 85.84 compared to Friday’s close of 85.23.
“The rupee is likely to trade in a broad range of 85.25 to 86.25 in the near term, with significant volatility expected,” said Jateen Trivedi of LKP Securities.
Gold traded in a volatile band between ₹87,900 and ₹88,500, as markets assessed the potential fallout from the escalating U.S.-China tariff standoff.
Investor sentiment remained cautious as markets awaited further signals from the U.S. on its next move in the ongoing trade dispute.
The upcoming U.S. Consumer Price Index (CPI) data is expected to be pivotal in shaping rate-cut expectations and could influence global gold prices. Domestically, all eyes are on the RBI’s upcoming policy meeting later this week, which may further impact rupee movement and add another layer of uncertainty for MCX Gold, Trivedi added. (Source: IANS)
