Sensex plunges 700 points, Nifty sinks below 24,550 amid global trade tensions and policy uncertainty
Stock Market Plunges -The Indian stock market witnessed a sharp decline today as the Sensex plunged 700 points and the Nifty slipped below 24,550. Investors were caught off guard as global trade tensions, weak economic data, and policy uncertainties triggered a sell-off across sectors.
Market analysts attribute the downturn to six key factors, ranging from Donald Trump’s tariff policies to foreign fund outflows and rising crude oil prices.
Table of Contents
1. Global Trade Tensions Escalate
Investor sentiment weakened after Donald Trump announced a 50% tariff hike on imported steel and aluminum, effective June 4, 2025. This move has raised concerns for Indian metal exporters, including Tata Steel, Hindalco, and JSW Steel, which collectively exported over $4.5 billion worth of metals to the US in FY25.
2. Weak Global Economic Data
Recent reports indicate a third consecutive month of contraction in US manufacturing, while China’s factory activity has also declined for the first time in eight months. These developments have weighed on global markets, with Nasdaq and S&P 500 futures falling over 0.3% in early trade.
3. Caution Ahead of RBI Policy Decision
Rate-sensitive sectors like banks, financials, autos, and consumer stocks came under pressure as investors await the RBI’s monetary policy outcome on Friday. The central bank’s stance on interest rates will be crucial in determining market direction.
4. Foreign Fund Outflows
Foreign Institutional Investors (FIIs) remained net sellers, offloading shares worth ₹2,589 crore on Monday. This persistent capital flight has added pressure on domestic equities.
5. Rising Crude Oil Prices
Brent crude, the global benchmark, surged 0.57% to $65 per barrel, following lower-than-expected output hikes from OPEC+. Higher crude prices pose a risk for India, which imports over 85% of its oil requirement.
6. Geopolitical Uncertainty
Tensions in Eastern Europe and West Asia have resurfaced, with Ukraine warning of drone attacks on Russia and Iran rejecting US proposals on nuclear talks. These developments have heightened market nervousness.
Conclusion – Stock Market Plunges
The stock market meltdown highlights the fragility of global economic conditions and the impact of policy decisions on investor sentiment. While short-term volatility may persist, analysts suggest focusing on long-term investment opportunities to navigate market fluctuations.
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