The SENSEX dropped as much as 636 points, and the NIFTY50 index touched an intraday low of 25,360, its lowest level since November 7.
Here are key reasons why markets are falling on Tuesday.
Equity markets across the world were trading with deep cuts after United States President Donald Trump threatened to slap a 10% extra tariff on imports from eight European countries, provoking a backlash from important trading partners that invest heavily in the US.
Markets across Europe were trading lower, with France’s CAC40 index falling 1.01%, Germany’s DAX declining 1.13%, and the United Kingdom’s FTSE100 index dropping 1.13%.
Trump threatened to implement a wave of increasing tariffs from February 1 on eight European countries until the US is allowed to buy Greenland, fuelling fears of a renewed trade war.
Asian markets closed lower as Japan’s Nikkei dropped 1.03%, China’s Shanghai Composite declined 0.01% and Hong Kong’s Hang Seng fell 0.32%.
On the flipside, safe-haven gold and silver surged to new peaks, with gold trading above $4,700 per ounce for the first time.
Sell-off across sectors
Back home, selling pressure was visible across sectors, as all 15 major sector gauges compiled by the National Stock Exchange were trading lower, led by the NIFTY Realty index’s 4.6% fall. NIFTY Consumer Durables, Oil & Gas, PSU Bank, Pharma, Auto, Metal and IT indices also fell between 1% and 2%.
Broader markets were witnessing intense selling as the NIFTY Midcap 100 index dropped 2.44%, the NIFTY Smallcap 100 index plunged 2.72%, the NIFTY 500 index dropped 1.44%, and the NIFTY Next50 index fell 2.12%.
NIFTY50 gainers and losers
As many as 44 shares in the NIFTY50 index were trading lower. Eternal was the top loser in the NIFTY50 index; the stock fell 4.03% to ₹270.
Sun Pharma, InterGlobe Aviation, Jio Financial Services, Coal India, Adani Enterprises, Bajaj Finance and Bajaj Finserv also fell between 2.6% and 3.42%.
On the flipside, Tata Consumer Products, HDFC Bank, Dr Reddy’s Labs, Kotak Mahindra Bank, State Bank of India and Bharti Airtel were among the notable losers in the NIFTY50 index.
The overall market breadth was extremely negative, as 3,387 shares were declining while 799 were advancing on the BSE.