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India-US Trade Tensions Spark Sharpest Market Fall in a Month

Indian equity benchmarks recorded their sharpest single-day decline in a month, extending losses to a fourth consecutive session. The sell-off was triggered by reports that the US could impose tariffs as high as 500% on Indian goods, sparking widespread risk aversion. All sectoral indices ended in the red, with metal, oil & gas, and PSU bank stocks among the hardest hit. Analysts note the broader trend remains positive but warn of further short-term pressure if key support levels are breached.

Key Points: Sensex, Nifty Plunge on India-US Trade Tariff Fears

  • Sharpest fall in a month
  • Fears of 500% US tariffs
  • Fourth straight session of losses
  • Broad-based sectoral sell-off
2 min read

Sensex, Nifty end lower as India-US trade tension spook investors

Indian markets fell sharply as reports of potential 500% US tariffs on Indian goods spooked investors, causing broad-based selling across sectors.

"A sustained close below 25,900 increases the probability of further downside toward the 25,800-25,700 zone - Market Analyst"

Mumbai, Jan 8

Indian equity markets witnessed their sharpest fall in a month on Thursday as benchmark indices extended losses for the fourth straight session, weighed down by rising concerns over India-US trade tensions.

Investor sentiment turned cautious after reports suggested that the administration of US President Donald Trump could consider imposing steep tariffs of up to 500 per cent on Indian goods.

The possibility of such harsh trade measures triggered widespread selling across sectors, leading to broad-based risk aversion in the market.

By the end of the session, the Sensex closed at 84,180.96, slipping 780.18 points or 0.92 per cent.

The Nifty also ended lower at 25,876.85, down 263.9 points or 1.01 per cent.

"A sustained close below 25,900 increases the probability of further downside toward the 25,800-25,700 zone, while a recovery above 26,000 is essential to stabilise near-term sentiment," an analyst said.

"Despite the current correction, the broader weekly and monthly trend structure remains positive, although short-term corrective pressure may persist if key supports fail to hold," as per the expert.

On Sensex 30-packs, TCS, TechM, L&T, Reliance Industries and Tata Steel were among the top losers.

On the other hand, Eternal, ICICI Bank, Bajaj Finance, and BEL were the only gainers.

The selling pressure was even more pronounced in the broader market. Mid- and small-cap stocks saw sharp declines, with the Nifty Midcap 100 and Nifty Smallcap 100 indices falling nearly 2 per cent each.

Sector-wise, losses were widespread, with all indices ending in the red. Metal stocks bore the brunt of the sell-off as the Nifty Metal index dropped over 3 per cent.

Oil and gas stocks also remained under pressure, with the Nifty Oil and Gas index falling around 2.8 per cent.

PSU banking and IT stocks were among the other major laggards, declining about 2 per cent each.

Analysts said that the market mood remained cautious as investors grappled with global trade uncertainties and the potential impact of rising tariffs on India's export-driven sectors.

- IANS

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Reader Comments

S
Sarah B
As an NRI investor, I see this as a short-term panic. The fundamentals of the Indian economy are strong. Corrections like these are buying opportunities for long-term investors. Stay calm and focus on quality stocks.
A
Aditya G
Small and mid-cap investors like me are getting hammered. Down 2% is a huge hit in a single day. The market needs stability, not these geopolitical shocks every other month. My portfolio is deep in the red today. 😓
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Priyanka N
While the headline is scary, we must diversify our exports and reduce over-dependence on any single market. This is a wake-up call to strengthen trade with Europe, ASEAN, and Africa. Atmanirbhar Bharat is more important than ever.
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Michael C
Respectfully, I think the market reaction is a bit overdone. These are just reports and proposals. Tariffs of 500% seem like a negotiation tactic. The actual impact, if any, will be negotiated down. The analyst is right - the broader trend is still positive.
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Kavya N
Seeing Reliance and TCS among the top losers is worrying. These are bellwether stocks for retail sentiment. Hope the Finance Ministry issues a reassuring statement soon to calm the markets. The common investor's savings are at stake.

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