In today’s talk, we deep dive into how India joined the global market selloff amid US tariffs, recession fears, and investor panic.
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The Talk
It was a tense Friday morning for investors in India, as markets opened to a storm of red. What started as a regular trading day quickly turned into one of the most dramatic sessions in recent times. The Sensex, India’s leading stock index, tumbled more than 1,000 points during the day. By the end of the session, it had settled 930 points lower at 75,634.69 — a drop of 1.22%. The Nifty, another major index, fell 345.65 points or 1.49%, closing at 22,904.45.
But the pain didn’t stop there. The broader markets were hit even harder. The BSE Midcap index slumped by 3.08%, and the BSE Smallcap index crashed 3.43%. Almost every investor saw losses in their portfolios — out of all traded stocks, 2,820 fell while only 1,126 rose.
This sudden market crash wasn’t limited to India. It was part of a global selloff triggered by new tariff policies introduced by the United States. The US had decided to implement reciprocal tariffs, which means it would impose the same tariffs on countries that place tariffs on American goods. This led to fears of a new trade war — something that can shake the global economy.
The US markets were the first to react. On Thursday, American stock indices fell by up to 6% in a single day — a huge fall that sent shockwaves across the world. Investors panicked, and markets across Europe and Asia followed. European markets fell by up to 5%. In Asia, Thailand dropped 3.15%, Singapore 2.95%, and Japan 2.75%. Other countries like South Korea, Malaysia, and the Philippines also saw significant drops. The Chinese and Hong Kong markets were closed, but if they were open, they might’ve also felt the heat.
Back in India, the impact was felt beyond just the stock indices. Investor wealth saw a huge decline. The total market value of all listed companies on BSE dropped by ₹9.98 lakh crore in just one session. That’s a loss of nearly ₹10,00,000 crore in a day — a number big enough to give anyone chills.
Foreign portfolio investors (FPIs), who often play a major role in the Indian market, sold shares worth ₹3,483.98 crore. Even domestic institutional investors (DIIs), who usually provide some stability, sold shares worth ₹1,720.32 crore. This double blow added fuel to the fire.
One of the key sectors that took the biggest hit was IT (Information Technology). The Nifty IT index fell by 3.58% on Friday alone. For the entire week, it had dropped a shocking 9.15% — the biggest weekly fall since the COVID-19 crash in March 2020. Major IT companies like HCL Tech (down 10.7%), TCS (down 8.51%), and Infosys (down 7.58%) led the fall. Even Wipro and Tech Mahindra lost over 6% each.
Apart from IT, metal, pharma, and oil & gas stocks also saw heavy selling. The Metal index was one of the worst performers, falling by up to 6.56%. Companies like Hind Copper, NALCO, Tata Steel, Vedanta, and Hindalco saw their stock prices fall over 8%.
Experts believe this sharp fall is directly connected to the fear of recession in the US and globally. Tariffs can make goods more expensive, reduce demand, and slow down economies. According to Vinod Nair, Head of Research at Geojit Financial Services, the higher-than-expected US tariffs have triggered this bearish trend and increased uncertainty. There’s also worry that other countries may respond with their own retaliatory tariffs, leading to further tension.
US bond yields and oil prices are falling too, which often signals that investors expect weaker economic growth ahead. Crude oil prices, in particular, have dropped sharply — a factor that actually helped the Indian rupee.
While stock markets were bleeding, the Indian rupee strengthened. It rose by 21 paise, closing at 85.23 against the US dollar. During the day, it even crossed 85 — the strongest level so far this year. The rise in the rupee came as global crude prices fell and investors looked at India as a relatively safer place.
Only a few sectors managed to stay in the green. Financial services and FMCG (fast-moving consumer goods) posted marginal gains. Out of the 30 stocks in the Sensex, only 7 ended higher. In the Nifty, just 8 stocks stayed positive — a rare sight in such a broad selloff.
Prashanth Tapse, Senior VP at Mehta Equities, warned that the market is scared of the US slipping into a recession, which may also affect global growth. Falling metal and oil prices show that investors expect lower demand in the future — a clear signal that dark clouds may be forming over the global economy.
Friday’s crash reminded everyone that stock markets are closely connected across the world. A policy change in the US can ripple through markets in Asia, Europe, and beyond — and investors everywhere must be ready to handle such shocks.
We’ll continue to keep a close watch on the markets and bring you the latest updates as this global selloff unfolds. Stay tuned.