Mon Feb 03 16:06:51 UTC 2025: ## Global Tariff Fears Drag Down Indian Markets

**Mumbai, India** – Indian equities experienced a significant downturn on February 3rd, mirroring global market losses triggered by US President Trump’s announcement of new tariffs on Canada, Mexico, and China. The NSE Nifty 50 index fell 0.52 percent to 23,361.05, while the BSE Sensex dropped 0.4 percent to 77,192.86. This decline followed substantial losses in US and European futures markets, with the Dow Jones Industrial Average futures down 1.22 percent. Asian markets also suffered heavy losses, with Japan’s Nikkei 225 closing 2.5 percent lower.

The negative global sentiment overshadowed the impact of India’s recent federal budget, which had initially spurred a rally in consumer stocks due to promised personal income tax cuts. However, disappointment over infrastructure investment outlays offset these gains.

Analysts attribute the sharp sell-off to investor pessimism fueled by the escalating trade war. Prashanth Tapse of Mehta Equities highlighted the impact on mid- and small-cap stocks, as well as consumer goods and automobile sectors. The rupee’s depreciation against the dollar further exacerbated concerns about potential foreign investor exits.

Vinod Nair of Geojit Financial Services emphasized the unsettling global economic implications of the trade war, warning of potential challenges to international trade and increased global inflation and interest rates. Ajit Mishra of Religare Broking noted that the IT sector performed relatively well, while energy, metal, and FMCG sectors lagged.

Rupak De of LKP Securities pointed to the Nifty’s volatility and cautioned investors to remain vigilant, given the ongoing global uncertainty and upcoming economic indicators. The market’s trajectory will depend heavily on global cues, corporate earnings, and the Reserve Bank of India’s Monetary Policy Committee meeting.

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