Sensex Plunges 700 Points as Trump Tariffs Spark Global Market Fears

Weak global cues, a soaring dollar index, and relentless FII selling contribute to a ₹5 lakh crore wipeout in investor wealth.

February 3, 2025: Indian Stock Markets Nosedive Amid Global Trade Tensions

The Indian stock market faced a sharp selloff on Monday, February 3, with the Sensex plummeting over 700 points and the Nifty 50 slipping below 23,250. The downturn was driven by unfavourable global cues, including the announcement of sweeping tariffs by U.S. President Donald Trump. Investors saw a wealth erosion of ₹5 lakh crore in just minutes of trading.

Also Read: Rupee Hits All-Time Low at 87.29 Amid Trump Tariffs, Global Trade War Fears Intensify

Market Performance
The Sensex opened at 77,063.94, sharply down from its previous close of 77,505.96, and further fell to 76,791.09. Similarly, the Nifty 50 started at 23,319.35 and plunged to 23,246.55, losing nearly 1%. The broader market segments also suffered, with the BSE Midcap and Smallcap indices both shedding over 1%.

Also Read: Passenger Slams IndiGo for Ignoring Pre-Diabetic Meal Needs, Considers Legal Action

Key Factors Behind the Market Decline

Also Read: Trump’s Tariff Storm: Europe Next as Trade War Intensifies with Canada, China, and Mexico

1. Global Market Turmoil
   Asian markets mirrored the negative sentiment as Japan’s Nikkei and Korea’s KOSPI both tumbled by 3%. President Trump’s tariffs on Canada, Mexico, and China fueled fears of a global trade war, impacting market sentiment worldwide.
2. Trump’s Tariff Blow
   The U.S. has imposed a 25% duty on imports from Canada and Mexico, along with a 10% tariff on Chinese goods. While Mexico and Canada announced retaliatory measures, China opted for a diplomatic approach by moving the WTO against the U.S.
3. Rupee Hits Record Low
   The Indian rupee breached the 87 mark against the U.S. dollar for the first time, reflecting the strength of the dollar index, which soared to 109.6. A weaker rupee and rising dollar index added pressure to the Indian markets.
4. Focus on RBI Monetary Policy
   With the Union Budget now behind us, investor focus has shifted to the Reserve Bank of India’s (RBI) Monetary Policy Committee meeting. Speculations of a 25 bps rate cut have heightened caution among investors.
5. Relentless FII Outflows
   Since October 2024, foreign institutional investors have been pulling out funds from Indian equities, amounting to a staggering ₹2.7 lakh crore. The selling spree has weighed heavily on market sentiment, exacerbated by stretched valuations and weak earnings.

Outlook and Expert Opinions
Market experts believe the fallout from the tariffs, combined with global uncertainty, will continue to pressure the Indian markets. V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, stated, “Despite an excellent budget, the Trump tariffs have triggered heightened uncertainty, affecting investor sentiment globally.”

---

Tags:

Sensex Crash, Nifty 50, Trump Tariffs, Indian Stock Market, Global Trade War, FII Selling, RBI Monetary Policy, Rupee Depreciation, Dollar Index, Market Volatility