Freefall Market: Nifty 50, Sensex cuts 16% as global trade tensions escalate

Indian stock market crashes: Installing global trade tensions has shocked investors’ confidence in risky assets, leading to today’s wave of Asian stock sales, and the Indian market is no exception. Stocks in all sectors have been witnessing huge sales pressure since the opening ceremony, causing the Nifty 50 to lose 440 points and hit 22,105 points of the day.

Today’s sales dropped the index by 4,172 points (16%), from the September peak of 26,277 points. Similarly, Sensex started at 12,819 points (15%) from the peak of 85,978. In today’s meeting alone, Sensex fell 1,453 points to 73,159 days.

The two indexes have dropped 5.5% so far this month and are expected to decline for five consecutive months, which is an extremely rare situation. For the Nifty 50, this marks the first five-month streak since 1996 and the second decline since the index was launched in July 1990.

As valuation concerns continue to weigh on investors’ sentiment, wider sales pressures are stronger, leading to more serious corrections. The Nifty Midcap 100 index fell nearly 3% to 47,485 points in today’s meeting, reducing it by 22% from its peak.

Similarly, the Nifty SmallCap 100 index slipped at 3.55%, hitting 14,617 points of the day, obtaining a 26% correction from its peak of 19,640 points.

Tariff worries lift investors out of risky assets

It appears that investors’ confidence in Indian stocks is weakening due to the combination of domestic and global factors, while trade tensions are increasing, sentiment towards investors is getting worse and prompting overseas investors to exit stocks, especially in emerging markets such as India.

FPI has maintained net sellers since October, steadily unloading its holdings at an accelerated pace. In just five months (October 2024 to February 2025), they quit ₹The 310 million million yuan of Indian exchanges has allowed domestic investors to absorb the entire sales pressure.

Trump announced Thursday that his proposed tariffs on Mexico and Canada will take effect on March 4, a month after the halt. He claimed that neither country has done enough to curb the movement of drugs on the border.

He also said China, which has already imposed 10% from the United States, will face a 10% tax. The unveiling of new tariffs on Chinese imports increases the risk of Beijing’s retaliation and escalates tensions between the world’s two largest economies. In addition, Trump threatened to impose a 25% tariff on EU imports.

Last week, he proposed a 25% tariff on automobile, semiconductor and pharmaceutical imports, and the report indicated that the formal announcement could be issued on April 2. His administration is also imposing tariffs on all countries that do not have Tarif barriers to restrict access to the U.S. market.

Trump’s trade actions are not only disturbing, but also American consumers and the Federal Reserve. If tariffs come into effect, consumers are increasingly worried that domestic prices may rise, which could reduce economic growth.

At the same time, his active trade stance complicated the Federal Reserve’s monetary policy. The Fed’s efforts to reduce inflation to near its 2% target are now concerned about price increases, which has affected policymakers pausing the reduction rate in January.

Disclaimer: The opinions and suggestions given in this article are those of individual analysts. These do not represent the mint’s point of view. We recommend that investors contact certified experts before making any investment decisions.