The benchmark BSE Sensex fell more than 350 points, while the NSE Nifty 50 lost 70 points in initial Tuesday trading. The fall came after US President Donald Trump’s assurance that his planned tariffs on Canada and Mexico would kick in as scheduled.
Sensex declined 0.45% to 72,753 and the Nifty dropped 0.64% to 21,979. All 13 large-cap sectors lost at the market opening, with small- and mid-cap stocks losing about 1% each.
Stock Market Volatility Continues
On Monday, the Sensex had a shaky day before it closed 112 points down at 73,085. The index opened in the positive but quickly fell to 72,784 as heavyweight stocks were aggressively sold. The Nifty prolonged its losing trend to nine sessions, closing at 22,119 after a low of 22,004 intra-day.
Global Markets React to Tariff Concerns
Trump’s tariff action shook world markets, with large Asian indexes dropping. Tokyo’s Topix index fell 1.48%, and Hong Kong’s benchmark Nikkei 225 index lost 2.43%.
On Wall Street, all three of the major indexes closed sharply down. The Dow Jones Industrial Average fell 649.67 points (1.48%), the S&P 500 fell 104.78 points (1.76%), and the Nasdaq Composite lost 497.09 points (2.64%).
Trump’s Tariff Policy Sparks Trade Tensions
Donald Trump reiterated on Monday that Canada and Mexico cannot avoid the new tariffs, which go into effect on Tuesday. The 78-year-old Republican president had originally announced broad import taxes in February, only to put them on hold. He has cited illegal immigration and drug-smuggling concerns as the reason for the tariffs, which will hit more than $918 billion worth of US imports from its neighbors in North America.
Canada’s Prime Minister Justin Trudeau announced retaliatory tariffs on US imports in response to Trump’s decision.
“Canada will not let this unjustified decision go unanswered,” Trudeau stated.“Should American tariffs come into effect tonight, Canada will, effective 12:01 am EST tomorrow, respond with 25 percent tariffs against $155 billion of American goods.”
Meanwhile, Mexican President Claudia Sheinbaum assured that her government has contingency measures prepared for any action taken by Trump.
China and India Also in the Crosshairs
Trump also ratcheted up trade tensions with China by signing an order to increase a current 10% tariff on Chinese imports to 20%. Beijing responded by saying it would take countermeasures to safeguard its interests.
Additionally, Trump has threatened retaliatory tariffs on all US trading partners, including India, and raised questions about the effect on global trade flows.