Sensex dips 800 pts, Nifty below 24,600 as latest tariff hikes jolt markets

Why stock markets fell today: Indian equity benchmark fell, tracking Asian markets as trade tensions flared up over the weekend with fresh steel and aluminium tariffs by the US

Why stock markets fell today: Indian benchmark indices plunged after the opening bells, taking cues from a decline in their Asian peers amid fresh tariffs from the US. 

 

The BSE Sensex index plunged 796 points or 0.98 per cent in the intraday trade to hit a low of 80,654 during the day. The NSE Nifty50 fell 224  points, or 0.91 per cent, to 24,526. The indices registered their worst fall since May 27 this year. 

 

The broader market indices continued to outperform the benchmarks. The Nifty MidCap was 0.08 per cent up while the Nifty SmallCap index was 0.01 per cent lower, respectively. 

 

 

  Except for Nifty Realty, fast-moving consumer goods (FMCG) and PSU Banks, all sectors were trading lower on Monday, led by information technology (IT) and metal. 

 

Furthermore, the market breadth remained skewed in favour of sellers. About 1,336 stocks rose, 1,779 declined, while 187 remained unchanged on the BSE.   

 

The market structure favours the continuation of the ongoing consolidation phase and global headwinds like renewed tariff concerns that will restrain a breakout rally, according to VK Vijayakumar, Chief Investment Strategist, Geojit Investments. 

Key reasons behind the Sensex, Nifty fall today:

Asian markets decline: Most equity benchmarks in Asia traded lower on Monday as trade tensions flared up over the weekend, with US President Donald Trump announcing additional tariffs on steel and aluminium to 50 per cent from 25 per cent. 

 

Later, the European Commission said on Saturday that Europe was prepared to retaliate against President Donald Trump's plan to double tariffs on imported steel and aluminium. 

 

In Asia, Japan's Nikkei was down 1.5 per cent while Hang Seng plunged over 2 per cent on Monday. All major equity benchmarks were in red with South Korea and Australia's index down 0.5 per cent. S&P 500 futures eased 0.2 per cent and Nasdaq futures lost 0.3 per cent. 

 

President Trump’s 50 per cent tariffs on steel and aluminium are a clear message that the tariff and trade scenario will continue to be uncertain and turbulent, Vijayakumar said, impacting markets on Monday. 

 

Stock market volatility continues as China has now accused the US of violating its recent trade deal and stated that it will take measures to defend its interests. However, Treasury Secretary Scott Bessent said he’s confident the latest trade clash between Trump and Xi Jinping “will be ironed out” in a call shortly. 

 

Last week, the US Court of International Trade struck down much of the president's steep levies, which were reversed a day later by a federal appeals court.  

 

IT, Metal stocks plunge: The losses in the domestic markets were led by IT and metal stocks as the latest trade tensions keep investors on edge. The tech stocks fell on Monday as tariff threats continue to weigh on the US economy. The gauge for tech stocks -- Nifty IT -- fell as much as 1.5 per cent during the session, with Mphasis, Persistent Systems and HCL Technologies leading the decline. 

 

Meanwhile, in the metal space, Welspun Corp, Vedanta and JSW Steel were among the top losers as Trump's steel and aluminium will become June 4, Wednesday. The Nifty Metal index was the top sectoral loser, falling as much as 1.6 per cent on Monday. Shares of Tata Steel, Hindalco and NMDC were trading with a loss of nearly 1 per cent.  

 

Key levels to watch: If the market breaches the 24,650 level, it could shift sentiment, leading to a retest of levels around 24,450, according to Shrikant Chouhan, head of equity research at Kotak Securities. However, a break of 24,450 could trigger the market may fall to 23,900 levels, Chouhan said, adding that the strategy should be to design a trading strategy with minimal stop losses.