Domestic equity markets slumped following the overall global trend. Not only did the Asian markets open lower, but futures tied to key US indices tanked. As of 9:40 PM, the Nifty 50 slid 1% to a low of 23,239.15, and the Sensex dropped over 730 points, or 0.9%, to a low of 76,774.05.
Even, the GIFT Nifty implied that the markets would open on a negative note as it was trading down 202 points or 0.85% at 23,366. The fall in markets came on the back of Trump’s tariff war, supported by other causes. Here are three major reasons why markets are falling today-
Trump’s tariff tolls on markets
US President Donald Trump imposed import tariffs on Mexico and Canada of 25%, while it levied 10% on China, following his promise. However, Trump didn’t name India in the first set of tariff hikes, but in one of his campaign speeches, he named India too. “It is important to understand that the 25% tariffs imposed on Mexico and Canada are to punish them for issues like immigration and illicit trade in fentanyl. Trump may use tariffs again against other countries on non-trade issues. China’s response to the 10% tariffs has been more responsible,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services. They are moving the WTO against the US action.
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The Government of India focused on consumption and savings in the Union Budget 2025-26 instead of capital expenditure, almost for the first time in a decade. This is impacting markets as it was expecting some key measures for railway and infrastructure. “We need to keep a keen eye on whether this change is a one-off or if it suggests a change in the paradigm. Secondly, after many years, the receipt projections look aggressive,” said Motilal Oswal Financial Services in a research note.
Continuous FII selling
The foreign institutional investors have been on a continuous selling spree.
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