Benchmark stock market indices faced a brutal sell-off on Friday, as global uncertainties and fears of escalating trade tensions weighed heavily on investor sentiment. Both the S&P BSE Sensex and the NSE Nifty50 ended the day with sharp losses, driven by steep declines in key sectors including metals, automobiles, information technology, real estate, and pharmaceuticals.
The Sensex tumbled 930.67 points, or 1.22%, to close at 75,364.69, marking one of its steepest single-day drops in recent months. The Nifty50 slid 345.65 points, or 1.49%, to settle at 22,904.45. At one point during the trading session, the Sensex had plummeted by over 1,000 points, while the Nifty50 dipped well below the crucial 22,900 support level, reflecting deepening pessimism across the market.
This broad-based decline wasn’t confined to blue-chip stocks. Mid-cap and small-cap indices, which had previously seen robust investor interest, also crumbled under intense selling pressure, with many stocks witnessing sharp intraday cuts of over 3-5%.
The day’s losses were fueled largely by mounting concerns over the United States' decision to implement reciprocal tariffs, especially on Chinese goods and foreign-made vehicles. The uncertainty deepened amid reports suggesting that former US President Donald Trump, if re-elected, may impose a 25% tariff on all automobiles imported into the United States, triggering fears of a global trade war resurgence.
Metal stocks, which are typically sensitive to global trade dynamics and commodity prices, were the worst hit. Tata Steel plunged by 9%, registering its steepest fall in months. Hindalco, another metal heavyweight, also saw significant erosion in market capitalization. The sector's decline came amid worries about declining international demand, higher export duties, and pressure on margins due to volatile commodity pricing.
Automobile stocks, particularly those with global exposure, faced a similar fate. Tata Motors was among the top losers, falling nearly 7% during the session, as the tariff news sparked panic regarding its UK-based subsidiary Jaguar Land Rover (JLR) and the potential impact on overseas revenues. Other major auto stocks like Mahindra & Mahindra and Maruti Suzuki also ended deep in the red.
Meanwhile, information technology stocks, which are heavily reliant on the US and European markets, also suffered significant losses. IT majors such as Infosys, TCS, Wipro, Tech Mahindra, and HCLTech fell sharply as fears mounted over the impact of rising US inflation and higher interest rates on corporate tech spending and outsourcing demand. Analysts believe that the continued strength in US inflation data could delay the Federal Reserve’s rate cut plans, thereby impacting client budgets in the tech sector.
Despite the widespread carnage, a handful of stocks managed to buck the trend. Among the top gainers on the Nifty50 were Tata Consumer Products, Bajaj Finance, HDFC Bank, Nestle India, and Apollo Hospitals. These stocks were largely driven by their defensive business models, strong fundamentals, and relatively lower exposure to global headwinds. Defensive plays such as FMCG and select healthcare stocks witnessed some buying interest as investors sought safety in stable earnings amid broader market volatility.
Experts have warned that volatility may persist in the coming weeks. Vinod Nair, Head of Research at Geojit Financial Services, said, “The sudden spike in US tariffs has come as a shock to global equity markets, prompting fears of a broader trade and economic slowdown. This has triggered risk-off sentiment globally. While India’s direct exposure to these tariffs might be limited, the indirect consequences on trade, inflation, and currency are far-reaching.”
He further noted that with the Q4 earnings season coming to a close, investors are now turning their attention toward macroeconomic triggers, both domestic and international. “Although a sequential improvement in corporate earnings is likely, the market may remain stuck in a consolidation phase due to ongoing global uncertainties,” Nair added.
Ajit Mishra, SVP – Research at Religare Broking, echoed a similar view. “Given the prevailing headwinds, we foresee a time-wise correction in Nifty, with intermittent volatility. Traders and investors should maintain a stock-specific approach, and deploy hedged strategies to mitigate risks. Until there is greater clarity on the global front, caution will continue to dominate investor behavior.”
In conclusion, Friday’s bloodbath in the markets underscores the growing fragility of global investor confidence, especially in the face of protectionist trade measures, inflationary pressures, and geopolitical tensions. While some respite may come from domestic economic data and policy stability, global cues are likely to remain the dominant driver of market direction in the near term. Investors are advised to remain watchful, avoid aggressive bets, and adopt a balanced approach with a focus on quality stocks and capital preservation.
