Benchmark stock market indices ended Monday’s session with significant losses, shedding 1% amid negative global cues and investor concerns over US President Donald Trump’s latest threat to impose new tariffs on steel and aluminum imports. Both the Sensex and Nifty closed in the red, reflecting heightened market volatility and weak investor sentiment. The BSE Sensex dropped by 548.79 points, closing at 77,311.80, while the NSE Nifty50 lost 178.35 points to settle at 23,381.60.
Adding to the market’s concerns, the rupee fell to an all-time low, exacerbating worries among investors. A weaker rupee increases the cost of imports and negatively impacts companies with significant foreign debt, leading to a cautious approach in equity markets. Currency depreciation also raises inflationary pressures, affecting corporate earnings and investor sentiment.
Vinod Nair, Head of Research at Geojit Financial Services, noted that global uncertainties, particularly the US tariff threats, continued to weigh on market sentiment. “Domestic yields are inching higher as investors stay cautious on riskier assets and shift their investments toward safe-haven options such as gold. On the earnings front, companies are facing downgrades in estimates due to a weak demand environment, margin pressures, and an overall cautious near-term outlook,” he said.
One of the hardest-hit sectors was the metal industry, with concerns mounting over the impact of US tariffs. The Nifty Metal index emerged as one of the worst-performing sectors, tumbling 2.6%. Major metal stocks, including Tata Steel, JSW Steel, Hindalco Industries, and Vedanta, witnessed sharp declines. Tata Steel, in particular, fell by 3.1%, making it one of the top losers among Nifty 50 constituents. Analysts believe that Trump’s tariff proposal could result in an oversupply of metals in other markets, leading to a decline in global base metal prices. This additional pressure compounds existing challenges in the sector, including lower margins and sluggish demand.
The broader market also saw substantial selling pressure, with midcap and smallcap stocks experiencing sharp declines. Both the Nifty Midcap 100 and Smallcap 100 indices fell by 2.1% each, reflecting widespread caution among investors. Heavyweight stocks such as HDFC Bank and Reliance Industries dropped 1% each, contributing to the broader market weakness. Experts attribute the selloff in mid and small-cap stocks to high valuations and concerns over earnings growth, which have made investors wary of holding riskier assets in the current uncertain environment.
All 13 major sectoral indices ended the session in the red, underscoring the broad-based nature of the market decline. Banking stocks saw profit booking, with HDFC Bank and ICICI Bank slipping by 1% each. FMCG stocks also traded weak, as concerns over rural demand persisted, dampening the sector’s growth prospects. Meanwhile, IT stocks remained under pressure due to global uncertainty and currency volatility, as a weaker rupee makes Indian IT exports more competitive but simultaneously raises operational costs.
VLA Ambala, Co-Founder of Stock Market Today, warned that the Indian economy could be heading toward a prolonged bear phase, further exacerbated by factors such as slower GDP growth, a depreciating rupee, continuous tariff threats, weak domestic demand, costlier imports, and a widening trade deficit. She highlighted that these elements could significantly impact corporate earnings and overall economic growth.
“Collectively, these factors hint at a prolonged bear phase. Besides these, Nifty and Sensex have already corrected by 12% this quarter and are likely to slump further, as current market conditions could leave a lasting impact on company earnings and GDP growth. Considering these aspects, the index could gain support between 23,200 and 23,050 and face resistance between 23,410 and 23,480 in the next session,” she added.
Market participants are now closely monitoring global developments, particularly the US trade policy stance and its impact on international markets. Domestically, investors will be watching corporate earnings reports, inflation data, and policy measures from the Reserve Bank of India to assess the broader economic trajectory. Given the current scenario, experts advise caution, suggesting that investors adopt a defensive approach and allocate capital selectively to resilient sectors such as pharmaceuticals, FMCG, and technology while waiting for greater clarity on the macroeconomic front.
