Sensex drops 700+ points as US-China tensions and Ukraine fears weigh on markets

The Indian stock market experienced a sharp decline Monday, with the BSE Sensex dropping over 700 points amid rising global tensions. The market opened at 81,214.42 but quickly fell to 80,718.30, down 732.71 points, while the NSE Nifty50 lost 197.45 points, reflecting investor anxiety over escalating US-China trade disputes and geopolitical risks in Ukraine.

Despite the negative global backdrop, domestic economic indicators remain robust. India’s Q4 GDP growth was reported at a strong 7.4%, surpassing expectations and signaling resilient economic momentum. VK Vijayakumar, Chief Investment Strategist at Geojit Investments, noted, “On the domestic front the tailwinds are getting stronger with the latest Q4 GDP growth data coming at 7.4%, which is much better-than-expected.”

However, global uncertainties continue to weigh heavily on markets. Vijayakumar highlighted the impact of renewed trade tensions, stating, “President Trump’s 50% tariffs on steel and aluminium is a clear message that the tariff and trade scenario will continue to be uncertain and turbulent.” This sentiment was echoed by Devarsh Vakil, Head of Prime Research at HDFC Securities, who warned that “heightened fears of escalating conflict between Ukraine and Russia” are likely to keep Indian markets subdued.

Asian markets broadly declined as well, with China firmly rejecting US accusations of violating a recent trade deal, further fueling market volatility. Chinese PMI data indicated ongoing pressure on business activity due to the trade war.

In summary, while India’s economic fundamentals remain strong, the market is currently buffeted by external geopolitical and trade-related headwinds, leading to significant volatility and investor caution.

The BSE Sensex plunged over 700 points Monday amid escalating US-China trade tensions and fears of conflict in Ukraine, despite India’s stronger-than-expected Q4 GDP growth of 7.4%. Market volatility surged as investors weighed global uncertainties against domestic economic resilience.