Markets extend losses; Sensex down 2941 points

Indian equity benchmarks extended losses in morning session with S&P BSE Sensex was down 2941 points, while Nifty down by 959 points, mirroring a sharp fall in global equities. Traders remained cautious as exchange data showed foreign institutional investors (FIIs) offloaded equities worth Rs 3,483.98 crore on a net basis on Friday. Some concern also came as Former World Bank Chief Economist Kaushik Basu described the reciprocal tariffs imposed on approximately 60 countries by the Trump administration as baffling, saying that while these tariffs will have some adverse effects on India, the major impact will be felt in the US. He further said that it is also not really a reciprocal tariff as the Trump administration calls it, it is based on the trade deficit the US has with India. Market participants remained on sidelines as the Reserve Bank of India's monetary policy committee began its three-day deliberations on key interest rates. The decision of the six-member rate-setting panel will be announced on Wednesday. On the global front, Asian markets are trading lower after US President Donald Trump's tariff hikes and retaliation from China fanned fears that a full-blown trade war will impact economic growth across the globe.

The BSE Sensex is currently trading at 72423.36, down by 2941.33 points or 3.90% after trading in a range of 71425.01 and 73149.12. All the 30 stocks are declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 4.99%, while Small cap index was down by 6.53%.

The top losing sectoral indices on the BSE were Metal down by 7.63%, Industrials down by 6.39%, Basic Materials down by 6.18%, Capital Goods down by 5.98% and IT down by 5.79%, while there are no gainers on the BSE sectoral front. 

The top losers on the Sensex were Tata Steel down by 10.18%, Tata Motors down by 9.52%, Larsen & Toubro down by 6.91%, HCL Technologies down by 6.70% and Infosys down by 5.14%.

Meanwhile, State Bank of India (SBI) in its latest report has said that India should strengthen its Production-Linked Incentive (PLI) schemes in light of growing global trade competitiveness, especially after U.S. President Donald Trump announced reciprocal tariffs on several countries, including India. It stated that India has a strong opportunity to benefit from the global shift in trade, especially with the U.S. imposing higher tariffs on Chinese goods.

It recommended that the Indian government expand the current PLI schemes across key sectors like textiles, engineering goods, and gems and jewellery. It suggests widening the coverage of the scheme to include more products and extending its duration by three more years. This would help boost investments in domestic industries and make Indian products more competitive in the global market.

It said ‘The Indian government should expand existing Production Linked Incentive (PLI) schemes in these sectors to cover a wider range of products and extend their duration by 3 years, thereby bolstering domestic industries’ investment and global competitiveness.’ One of the key areas where India stands to gain is in exports to the U.S. With tariffs on Chinese goods going up, India can increase its market share in sectors such as textiles, apparel, and footwear. Additionally, India has manufacturing strength in iron and steel products, which can also benefit from these trade changes.

However, it pointed out that the U.S. has imposed a 26 per cent tariff on Indian goods, compared to India’s 15 per cent tariff on American products. This imbalance should be addressed through ongoing trade negotiations between the two countries. India is reportedly willing to reduce tariffs significantly on over $23 billion worth of American goods sold in India as part of the India-U.S. trade deal, which could help in resolving the issue.

The report also mentioned that the reciprocal tariffs being imposed by the U.S. on countries like China, Vietnam, Bangladesh, and Indonesia could give Indian exporters an edge. India may gain from the expected shift in global supply chains, opening up new opportunities for export growth. Sectors likely to be affected due to the changes in tariffs include textiles, engineering, and gems and jewellery. Indian exporters must stay prepared to tap into the potential gains and strengthen their position in global trade.

The CNX Nifty is currently trading at 21945.30, down by 959.15 points or 4.19% after trading in a range of 21743.65 and 22190.00. All the 50 stocks are declining on the index.

The top losers on Nifty were Trent down by 17.96%, Tata Steel down by 10.29%, Tata Motors down by 8.99%, JSW Steel down by 8.09% and Hindalco down by 7.32%. 

Asian markets are trading lower; Nikkei 225 slipped 2370.17 points or 7.02% to 31,410.41, Taiwan Weighted lost 2072.21 points or 9.73% to 19,226.01, Hang Seng declined 2445.19 points or 11.98% to 20,404.62, KOSPI dropped 129.63 points or 5.26% to 2,335.79, Straits Times fell 310.8 points or 8.12% to 3,515.06 and Shanghai Composite weakened 211.84 points or 6.77% to 3,130.17.