Indian stock markets continued their downward spiral for the fifth consecutive session on Thursday, with the BSE Sensex declining 331.62 points or 0.43 percent to settle at 76,059.77. The broader market also witnessed heavy selling pressure as investors remained cautious over escalating US trade tariffs and heightened tensions in West Asia.
Impact of US Trade Tariffs
The latest round of US trade tariffs on imports from several countries, including India, has dampened investor sentiment. The White House announced additional levies on steel and aluminum products, raising fears of a global trade war. Market participants are worried that these protectionist measures could disrupt supply chains and slow down economic growth. According to a report by a leading brokerage, the tariffs could reduce Indian exports to the US by up to $2 billion annually.
West Asia Tensions Add to Uncertainty
Geopolitical risks from West Asia further weighed on the markets. The ongoing conflict between Israel and Iran-backed militias has escalated, with recent missile strikes on oil tankers in the Persian Gulf. This has led to a spike in crude oil prices, which rose nearly 3 percent on Thursday. Higher oil prices are a concern for India, which imports over 80 percent of its crude oil requirements, as they widen the trade deficit and fuel inflation.
Market Performance Across Sectors
Almost all sectoral indices ended in the red, with banking, auto, and metal stocks taking the biggest hits. The Nifty Bank index fell 0.8 percent, while the Nifty Auto index lost 0.6 percent. Metal stocks declined 1.2 percent on fears of reduced demand from China. Among the Sensex constituents, Tata Steel, Maruti Suzuki, and ICICI Bank were the top losers, shedding between 1.5 percent and 2 percent. On the other hand, defensive stocks such as Hindustan Unilever and Nestle India managed to close marginally higher.
Broader Market and Investor Sentiment
The broader markets also suffered, with the BSE Midcap index dropping 0.9 percent and the BSE Smallcap index falling 1.1 percent. The Nifty 50 closed at 23,145.60, down 109.85 points or 0.47 percent. Foreign institutional investors (FIIs) continued to sell, pulling out over ₹2,000 crore in the past three sessions. Domestic institutional investors (DIIs) provided some support, but their buying was insufficient to stem the decline.
Outlook and Expert Views
Market experts expect the volatility to continue in the near term as global uncertainties persist. "The combination of trade protectionism and geopolitical tensions is a double whammy for emerging markets like India," said Ravi Sharma, Head of Research at a Mumbai-based brokerage. "Investors should focus on quality stocks with strong fundamentals and avoid risky bets." The outlook remains cautious until clarity emerges on tariff negotiations and West Asia peace efforts.
The markets are now eyeing the upcoming quarterly earnings season and the monsoon progress for domestic cues. However, global factors are likely to dominate in the coming weeks.
