India VIX surges 6% as Sensex tumbles 800 points on Trump’s steel tariff hike

Indian markets plunged sharply on June 2, 2025, with Sensex dropping nearly 800 points and Nifty nearing 24,500, driven by US President Donald Trump's announcement to double steel and aluminium tariffs to 50%. Despite strong domestic GDP growth of 7.4%, foreign investors sold ₹6,449.74 crore in equities, while India VIX spiked 6%, signaling heightened market volatility and investor concern over global trade tensions.

Sources:
ReutersLivemintM+3
Updated 15m ago
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Sources: LivemintMReuters+2
India's stock market experienced a sharp downturn on June 2, 2025, as the BSE Sensex tumbled nearly 800 points, closing around 80,654, while the Nifty 50 slipped below 24,600. This selloff was triggered by U.S. President Donald Trump's announcement to double tariffs on imported steel and aluminium to 50%, effective June 4, reigniting global trade tensions.

The India VIX, a key gauge of market volatility, surged 6%, reflecting heightened investor anxiety. The tariff hike particularly impacted metal and IT sectors, with the Nifty Metal index falling 0.9% and the Nifty IT index dropping over 1%, as these industries have significant exposure to U.S. markets.

Top losers included major companies such as HDFC Bank, L&T, Tata Steel, HCL Tech, Reliance Industries, Bajaj Finance, Infosys, Tech Mahindra, Bharti Airtel, and Tata Motors. Despite robust domestic economic growth, with Q4 GDP growth at a strong 7.4%, market sentiment was overshadowed by global trade uncertainties.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted, "U.S. trade policy uncertainty remains a key overhang for markets as Trump's tariffs on steel and aluminium signal further turbulence."

Foreign portfolio investors (FPIs) also sold Indian equities worth ₹6,449.74 crore in the previous session, adding to the downward pressure.

The market reaction underscores the fragility of investor confidence amid geopolitical tensions and protectionist trade policies, despite positive domestic fundamentals. Analysts warn that ongoing tariff disputes could continue to weigh on Indian equities in the near term.

Key stats:
- Sensex dropped nearly 800 points to around 80,654
- Nifty 50 fell below 24,600
- India VIX rose 6%
- Nifty IT index down over 1%
- Nifty Metal index down 0.9%
- FPIs sold ₹6,449.74 crore in equities

The market's sharp reaction highlights the interconnectedness of global trade policies and domestic market performance, with investors closely monitoring further developments in U.S. tariff measures.
Sources: LivemintMReuters+1
India's Sensex plunged nearly 800 points and the India VIX surged 6% on June 2, 2025, as U.S. President Donald Trump announced doubling steel and aluminium tariffs to 50%, stoking global trade tensions. Metal and IT stocks led losses amid investor concerns over tariff impacts despite strong domestic growth.
Section 1 background
The Headline

Sensex tumbles 800 points as Trump doubles steel tariffs

Despite robust domestic growth, U.S trade policy uncertainty remains a key overhang for markets as Trump's tariffs on steel and aluminium signal further turbulence.
VK Vijayakumar
Chief Investment Strategist at Geojit Financial Services
Reuters
Key Facts
  • US President Donald Trump announced tariffs on steel and aluminium imports would double to 50% from June 4, 2025, reigniting global trade concerns and US-China tensions.LivemintReuters
  • Indian equity benchmarks opened lower amid these concerns despite strong domestic GDP growth of 7.4%, with Sensex down 0.71% at 80,870 and Nifty at 24,586, down 0.67%.22
  • Sensex fell sharply by nearly 800 points intraday on June 2, 2025, dropping 797 points to an intraday low of 80,654.26, with Nifty 50 nearing 24,500.Livemint
  • Key sectors like metals and IT, which have high US exposure, saw significant declines, with the Nifty IT index falling over 1% and the Nifty Metal index down around 0.9%.2Reuters
  • Foreign portfolio investors sold Indian equities worth ₹6,449.74 crore in the cash segment in the previous session, adding to market pressure.Livemint
  • India VIX rose by 6%, signaling increased market volatility and investor anxiety amid the tariff-related uncertainty.M
Key Stats at a Glance
Sensex decline
581 points
1
Nifty decline
165 points
1
Sensex percentage decline
0.71%
1
Nifty percentage decline
0.67%
1
Nifty IT index decline
1%
1
Nifty Metal index decline
0.9%
1
Nifty 50 percentage decline
0.65%
ReutersM
Sensex intraday fall
797 points
Livemint
Sensex intraday low
80,654.26 points
Livemint
Sensex opening level
81,214.42 points
Livemint
FPI selling in Indian equities
₹6,449.74 crore
Livemint
India VIX increase
6%
M

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Section 2 background
Background Context

Strong GDP growth overshadowed by tariff fears

Key Facts
  • Strong domestic economic data showed Q4 GDP growth at 7.4%, which is much better than expected, but this optimism was overshadowed by global trade concerns.1
  • Indian equity benchmarks started the week weaker as losses in metal and IT stocks overshadowed positive sentiment from strong domestic growth.ReutersM
Key Stats at a Glance
Q4 GDP growth
7.4%
1
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