India stocks witness bloodbath over US-China tariff threat fears; Sensex, Nifty down nearly 2%

New Delhi [India], February 28 (ANI): Indian stock indices witnessed a bloodbath on Friday, with both Sensex and Nifty tumbling close to 2 per cent each, at the time of filing this report.

At 1.57 pm, Sensex was trading at 73,242.90 points, down 1,369.53 points or 1.84 per cent, while nifty at 22,137.15 points, down 407.90 points, down 1.81 per cent.

The stock indices are tumbling amid heavy selling due to escalating concerns about a global trade war with US increasingly slapping tariffs.

On Thursday, President Donald Trump said that the 25 per cent duties on imports from Canada and Mexico would come into effect on March 4 and not April 2 as he had suggested the day prior.

Additionally, Trump also proposed an additional 10 per cent tariffs on imports from China.

“The spate of tariff announcements by Trump has been impacting markets and the latest announcement of additional 10 per cent tariff on China is a confirmation of the market view that Trump will use the initial months of his presidency to threaten countries with tariffs and then negotiate for a settlement favourable to the US,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

“How China responds to the latest round of tariffs remains to be seen. Even now the markets have not discounted a full blown trade war between the US and China,” Vijayakumar added.

China, in response, has reportedly warned the US of “countermeasures”.

Since assuming office for second term, US President Donald Trump has reiterated his stance on tariff reciprocity, emphasising that the United States will match tariffs imposed by other countries, including India, to ensure fair trade. This has likely kept investors on tenterhooks.

Domestic stock markets are also under pressure due to the continued outflow of foreign portfolios from India.

Sensex is now over 12,000 points below its all-time high of 85,978 points. Sensex has so far slumped about 7 per cent this New Year.

Weak domestic economic growth has also been reflecting on the stock markets. The recent RBI repo rate cut failed to cheer markets, amid volatility world over.

In 2024, Sensex and Nifty accumulated a growth of about 9-10 per cent each. In 2023, Sensex and Nifty gained 16-17 per cent, on a cumulative basis. In 2022, they gained a mere 3 per cent each. Weak GDP growth, foreign fund outflows, rising food prices, and slow consumption were some of the hurdles, keeping many investors at bay in 2024.