Benchmark stock indices Sensex and Nifty tumbled in Monday’s trade, tracking the worst fall for US stocks in 2025 on Friday, as fears over proposed US tariffs hurt US business sentiment and raised inflationary concerns. The US President Donald Trump also reiterated that his administration will ‘soon’ impose reciprocal tariffs on countries like India and China.
Asian markets were weak, with Japan’s Nikkei tanking 1.3 per cent and Korea’s Kospi declining 0.6 per cent. Hong Kong and mainland China’s stock indices fell up to 0.4 per cent. The performance of Indian markets were in line.
The BSE Sensex fell 418.12 points or 0.56 per cent to 74,892.94. Nifty stood at 22,656.25, down 139.65 points or 0.68 per cent. Monday marked the fifth straight day of fall for the benchmark indices. The fall was led by Reliance Industries Ltd, HDFC Bank Ltd, ICICI Bank Ltd, Infosys Ltd, Tata Consultancy Services Ltd and Zomato Ltd.
“There are fears that the US is returning to stagflation, which could hurt global growth prospects, already undergoing a slowdown phase. Technically, with intraday perspective, the confirmation of strength can be seen only if Nifty closes above its psychological 23,000 mark. With an inter-month perspective, Nifty can gain strength if it breaches its biggest hurdle at 24.067 mark. which is also the benchmark’s 200 DMA,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities.
V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services said the market is facing headwinds from relentless FPI selling and global uncertainties relating to Trump tariffs.
The recent sharp surge in Chinese stocks is another near-term headwind. The ‘Sell India, Buy China’ trade may continue for some time since Chinese stocks continue to be attractive, Vijayakumar said.
“The sharp spike in CBOE VIX indicates that volatility will continue for some time. In the US, long-term inflation expectations are rising and, therefore, the expected rate cut by the Fed is unlikely to materialise. The Fed might even turn hawkish, impacting US stock markets. If this happens and the US bond yields start declining, FIIs may cease to be sellers in India and may even resume buying. The near-term scenario is highly uncertain,” he said.
The only positive for India is that the valuations of largecaps have turned fair and in certain segments like financials attractive, giving opportunities for long-term investors to buy. Even though the broader market valuations continue to be high, there are opportunities in select stocks in this segment, analysts said.
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