US President Donald Trump imposed tariff hikes on 60 countries last week and retaliation from China has triggered the fear of possible trade war between the two which will impact economic growth across the globe.
The tariff rivalry between United States and China has led to a massive stock market crash on Monday as both Sensex and Nifty dropped over 5 per cent amid massive sell-offs across the board. US President Donald Trump imposed tariff hikes on 60 countries last week and retaliation from China has triggered the fear of possible trade war between the two which will impact economic growth across the globe.
In Asian markets, Hong Kong's Hang Seng index tanked more than 12 per cent along with Tokyo's Nikkei 225 plunging nearly 8 per cent, Shanghai SSE Composite index dropping about 8 per cent and South Korea's Kospi sanking over 5 per cent.
US markets ended sharply lower on Friday. The S&P 500 plummeted 5.97 per cent, Nasdaq composite slumped 5.82 per cent and the Dow tumbled 5.50 per cent on Friday.
Indian equity indices closed on a weak note on April 7, with the Nifty falling below 22,200 amid broad-based selling across sectors. At the close, the Sensex was down 2,226.79 points, or 2.95%, at 73,137.90, while the Nifty dropped 742.85 points, or 3.24%, to settle at 22,161.60.
All the Sensex firms were trading in the negative territory. Tata Steel dropped over 9 per cent, followed by Tata Motors which cracked more than 8 per cent. Larsen & Toubro, HCL Technologies, Kotak Mahindra Bank, Infosys, ICICI Bank, Axis Bank, Reliance Industries and Adani Ports were the other big laggards.
The BSE smallcap gauge cracked 5.78 per cent, and the midcap index tanked 4.52 per cent, as per reports.
All the BSE sectoral indices were trading in negative territory. Metal tumbled over 7 per cent, commodities dropped 5.84 per cent, industrials (5.73 per cent), IT (5.01 per cent), consumer discretionary (4.94 per cent), BSE Focused IT (4.77 per cent) and teck (4.37 per cent).
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 3,483.98 crore on Friday, according to exchange data.
Global oil benchmark Brent crude dropped 2.94 per cent to USD 63.51 a barrel.
In Asian markets, Hong Kong's Hang Seng index tanked more than 11 per cent, Tokyo's Nikkei 225 plunged 7 per cent, Shanghai SSE Composite index dropped nearly 7 per cent and South Korea's Kospi sank over 5 per cent.
US markets ended significantly lower on Friday. The S&P 500 tanked 5.97 per cent, Nasdaq composite slumped 5.82 per cent, and the Dow tumbled 5.50 per cent on Friday.
Among the biggest losers was Mizuho Financial Group, whose shares sank 11.3 per cent. Mitsubishi UFJ Financial Group's stock lost 9.9 per cent as investors panicked over how the trade war may affect the global economy.
E-commerce giant Alibaba Group Holdings fell 10 per cent and Tencent Holdings, another tech giant, lost 9.4 per cent.
South Korea's Kospi lost 4.1 per cent to 2,363.82, while Australia's S&P/ASX 200 lost 3.8 per cent to 7,377.70, recovering from a loss of more than 6 per cent.
Oil prices sank further, with U.S. benchmark crude down 4 per cent, or $2.50, at $59.49 per barrel. Brent crude, the international standard, gave up $2.25 to $63.33 a barrel.
United States President Donald Trump's reciprocal tariffs have put most of the countries that had trade relations with US in a vulnerable position and it eventually led to a global market crash after a meltdown at the Wall Street on Friday.
China's Ministry of Finance announced on April 4 that it will impose an additional 34 per cent tariff on all US goods starting April 10, marking a retaliatory action in response to President Donald Trump's tariffs.
This may lead to a global trade war, with other countries including Canada, EU and Mexico already who are planning retaliatory moves as well.
A risk of inflation is also being predicted by investors as prices may go up because of high taxes.
Vikas Jain, Head of Research at Reliance Securities told PTI, "Both China and Japan index declined by 10 per cent and 8 per cent, respectively. This escalates the stakes in the ongoing trade war and raises concerns about a potential global recession that could affect everyone."
He further said, "On Friday, the US S&P 500 dropped by 6 per cent, and the Dow Jones fell more than 2,000 points, marking its worst week since the COVID-19 crisis. This came after China announced it would impose reciprocal 34 per cent tariffs on all US imports starting April 10."
The sharp increase in tariffs by both the US and China could lead to higher inflation, slower global growth, and intensify trade tensions, he added.
The Congress on Monday took a swipe at Prime Minister Narendra Modi over the stock market crash, saying both he and US President Donald Trump are experts in giving their economies "self-inflicted wounds" and that markets are reacting predictably in a "tariffying" manner.
In a post on X, Congress general secretary in-charge communications Jairam Ramesh said, "It is no wonder that Mr. Modi and Mr. Trump describe themselves as good friends. Both are experts in giving their economies self-inflicted wounds." "November 8, 2016 was demonetisation. April 2, 2025 was the bizarre reciprocal tariffs. Markets are reacting predictably in a tariffying manner," Ramesh said.
Donald Trump defended the global market crash as he likened reciprocal tariffs imposed by him as 'medicine' to fix debts faces by his country.
Trump was speaking to reporters aboard Air Force One on Sunday when he said he didn't want global markets to fall, but also that he wasn't concerned about the massive sell-off either.
Trump stated, "sometimes you have to take medicine to fix something."
"I spoke to a lot of leaders, European, Asian, from all over the world," Trump said.
According Associated Press, Trump said, "They're dying to make a deal. And I said, we're not going to have deficits with your country. We're not going to do that, because to me a deficit is a loss. We're going to have surpluses or at worst, going to be breaking even."