WHAT HAPPENED?

Indian stock market plunged sharply on Monday as global market faces uncertainty over Donald Trump's tariffs.

With today's crash, Indian stock markets have plunged to their lowest levels in approximately 10 months and analysts suggest that they could fall further due to massive volatility in global markets. Today’s crash was so severe that it wiped out Rs 19 lakh crore of the investor’s wealth.

Heavy selling pressure was evident across all segments, with banking, technology, and automobile stocks bearing the brunt of the negative sentiment.

But what the reasons for this blood bath?

This crash has followed U.S. President Donald Trump’s announcement of sweeping tariffs on most of the countries including India, which sparked fears of a global economic slowdown. Trump has announced 26% tariff on India while 54% on China. Due to costly imports in USA, it will face high inflation. As a result, the US NASDAQ fell by 20% from it’s peak.

Major Asian indices plunged as well such as Japan’s Nikkei fell 7%, South Korea’s Kospi dropped 5%, and China’s blue-chip index lost nearly 7%. Global commodity prices tumbled amid mounting fears of weakening demand and a looming economic slowdown.

One of the reasons also include the fears of a global trade war intensified after China announced retaliatory tariffs on a broad range of U.S. goods. The escalating tit-for-tat measures have raised concerns about a slowdown in global trade and economic growth.

India faces challenges but also opportunities as it has tariffs imposed but they are comparatively lower than other countries. Hence it is possible that manufacturers from China, Bangladesh, Vietnam may shift their base to India.