India’s equity market fell sharply on Tuesday as investors turned cautious after newly sworn-in US President Donald Trump slapped trade tariffs on goods entering from neighbouring countries such as Canada and Mexico.
The benchmark BSE Sensex fell 1,235.08 points or 1.60% to settle at 75,838.36. This is the first time in seven months that the index has closed below the 76,000 mark.
The NSE Nifty fell 320.10 points or 1.37% to close at 23,024.65. The big selloff wiped out more than Rs 7 lakh crore of investors’ wealth, as the total market capitalisation of BSE-listed firms came down to Rs 424.3 lakh crore at the end of Tuesday’s session from Rs 431.6 lakh crore in the previous session.
In the broader market, the BSE Midcap and BSE Smallcap indices dropped 2% each.
Donald Trump first declared that he would impose a 25% tariff on all goods entering the United States from Canada and Mexico, alongside a 10% tariff on Chinese goods, on his first day in office.
Trump also hinted at higher tariffs on several countries, thus raising chances of the full blow tariff war among nations.
“Markets were on a cautious mode in the past few sessions, but witnessed frenzied selling on Tuesday as investors now fear that Trump’s inaugural speech to safeguard America’s interest could hurt economic prospects of many countries, including India, going ahead,” said Prashanth Tapse, Senior VP (Research), Mehta Equities
Tapse warned that while foreign investors continue to offload domestic shares at will, any further increase in US bond yields could trigger massive selling. Foreign institutional investors (FIIs) have sold equities worth Rs 48,023 crore as of January 20, 2025.
Vikram Kasat, Head – Advisory, PL Capital – Prabhudas Lilladher said investor sentiment remained weak amid lacklustre Q3 earnings and sustained selling by FIIs. Vinod Nair, Head of Research, Geojit Financial Services said that the weak recovery in the ongoing Q3 earnings, coupled with a depreciating INR, are likely to prompt further outflows from FIIs.
“Mid and small-cap stocks underperformed compared to the main indices. The realty sector was hit the hardest due to weak pre-result updates, while banks suffered due to rising asset quality stress. Additionally, the expectation of an interest rate hike by BoJ is dampening market sentiment,” added Nair.
Among sectoral indices, Nifty Realty and Consumer Durables fell over 4% each. Foodtech firm Zomato was the biggest loser in the Sensex pack, contributing 170 points to the Sensex’s decline as its shares fell over 11% after reporting a 57% year-on-year drop in December quarter net profit.

See insights and ads
Like
Comment
Send
Share