By Bharath Rajeswaran
(Reuters) -Indian shares dropped on Monday after U.S. President Donald Trump imposed sweeping tariffs on Canada, Mexico and China, spurring concerns of a broader trade war.
The Nifty 50 was down 0.52% at 23,361.05, while the BSE Sensex shed 0.41% to 77,186.74.
Asian and European stock markets slumped as Trump’s tariffs triggered fears of a hit to global growth. [MKTS/GLOB]
Ten of the 13 major domestic equity sectors declined on the day, while the domestically focussed smallcaps and midcaps lost 2.1% and 0.9%, respectively.
The Indian rupee weakened past 87 per U.S. dollar for the first time as other regional currencies slumped.
“The Trump tariffs could severely disrupt global trade, slowing economic growth worldwide, which is spooking markets,” said Anirudh Garg, partner and fund manager at Invasset Portfolio Management Services.
“Indian markets are at a critical crossroads; the capex-driven sectors are now taking a backseat as their growth momentum has subsided while consumption-linked segments are set to gain,” Garg said.
State-owned companies declined 3.2%, taking their two-session loss to 6.2% and erasing all gains made in the pre-budget rally last week.
Stocks related to the country’s railways and road infrastructure tumbled for a second consecutive day, impacted by the government’s announcement of modest growth in capex in its union budget on Feb. 1.
Larsen & Toubro slipped 4.6%, extending its decline after a 3.4% loss on Saturday, with J.P.Morgan describing the muted capex growth in the budget as a sentiment negative for the sector bellwether.
Oil marketing companies Bharat Petroleum Corp and Indian Oil Corp lost 2.4% and 3.6%, respectively, while Hindustan Petroleum Corp slid 5.8%, as analysts flagged concerns over earnings due to the budgeted liquefied petroleum gas (LPG) subsidy.
The metal index fell 1.7% following Trump’s 10% tariff on imports from China, the world’s top metals producer and consumer. [MET/L]
On the day, drugmaker Divi’s Laboratories jumped 4.7% on a December-quarter profit beat.
(Reporting by Bharath Rajeswaran in Bengaluru; Editing by Varun H K and Sherry Jacob-Phillips)
