Trade War Fears Spook Markets: Sensex, Nifty Take a Hit as Rupee Weakens
Benchmark stock market indices closed lower on Monday, as the rupee hit a record low, denting investor sentiment due to the ongoing tariff war.
The S&P BSE Sensex tanked by 319.22 points to end at 77,186.74, while the NSE Nifty50 lost 121.10 points to close at 23,361.50.
Stock markets fell by nearly 1% in early trade, resulting in close to Rs 5 lakh crore loss as the global market got unsettled amid the onset of the ‘Trade War’, as tariff conflicts between the US and other nations are unlikely to yield any economic benefits.
“Instead, it may cause challenges to the global economy, heightening global financial risks. International trade, which had flourished under the framework of globalization, now faces threats from the new protectionist policies. Front and contour tariffs are expected to make the world less efficient and elevate global inflation & interest rates,” an analyst commented.
Another major trigger for the market decline was the declining rupee, which hit its all-time low as foreign investors continued to sell.
VLA Ambala, Co-Founder of Stock Market Today, stated that the rupee has weakened further and traded at a record low against the USD at 87.17, impacting investor wealth, with the Sensex plunging close to 750 points in intraday trade. However, the indices recovered in the afternoon session to close 0.5% lower.
Market Outlook & Key Takeaways:
– Global uncertainty due to tariff conflicts is expected to keep markets volatile.
– Rupee depreciation continues to pose risks to investor confidence.
– Foreign institutional investors (FIIs) remain net sellers, further pressuring domestic markets.
– Investors should exercise caution, focus on strong fundamentals, and closely monitor policy changes.
With global trade policies shifting towards protectionism, markets remain under pressure, leading to heightened volatility. The economic outlook remains uncertain, and investors should brace for further fluctuations in the coming days.
*Disclaimer:
This news article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult financial professionals before making investment decisions.