Wall Street, Europe, and Asia in Red as New Tariffs Threaten Global Economy

Wall Street, Europe, and Asia in Red as New Tariffs Threaten Global Economy

On February 3, 2025, the Indian stock market experienced a significant downturn following the Union Budget presentation. The BSE Sensex closed down 319.22 points (0.41%) at 77,186.74, while the NSE Nifty fell 121.10 points (0.52%) to 23,361.05. Rupee closed weaker compared to US Dollar at  ₹87.03 per dollar, after reaching an all time high of  ₹87.46.

Key Market Drivers:
- US President Trump's tariff announcements on Canada, Mexico, and China created global market turbulence
- Asian markets traded deeply in the red, with Japan's Nikkei falling 1000 points and Hong Kong's Hang Seng dropping 340 points5
- The Indian market was impacted by global economic tensions and cautious investor sentiment ahead of the RBI's monetary policy announcement

Sector Performance:
Worst-performing sectors: Oil & Gas, Metals, and FMCG
Gainers included IT and Consumer Durables stocks

Top Gainers from Key Indices:
Bajaj Finance: +5.12%
ShriramFin: +3.96%
M&M: +3%
Wipro: +2.72%
BajajFinsv: +2.32%

Top Losers from Key Indices:
LT: -4.69%
TataConsum: -3.07%
HeroMotoco: -2.98%
CoalIndia: -2.88%
BEL: -2.84%

FII and DII Trading Activity for February 3, 2025 in Cash market:
FIIs: Net sell of ₹3958.37 crore
DIIs: Net buy of ₹2708.23 crore

Global Market News:
U.S. Markets: The S&P 500 initially fell nearly 2% before stabilizing to a 0.7% loss. Tech companies, notably Nvidia, saw a 5% drop. 

European Markets: Indices like Germany's DAX and France's CAC 40 experienced declines. Major carmakers, including Volkswagen and BMW, faced drops between 5% to 6%. 

Asian Markets: Japan's Nikkei decreased by 2.9%, Australia's benchmark fell 1.8%, and Hong Kong stocks declined by 1.1% however closed the day at flat line. 

The U.S. dollar surged to record highs against the Chinese yuan, Mexican peso and Canadian dollar as well. Economists warn that these tariffs could reduce U.S. economic growth by 1.5 percentage points, potentially leading to recessions in Canada and Mexico, and causing stagflation in the U.S. 

In response to the U.S. tariffs, Canada and Mexico announced retaliatory measures, while China plans to challenge the tariffs at the World Trade Organization. Analysts caution that these actions may harm businesses and global economic stability, with potential risks of inflation and slower growth. 

Global Economic Indicators
- China's Manufacturing PMI stood at 50.1, indicating slow growth
- US markets closed lower after reaching record highs in January
- The US dollar strengthened, and oil prices increased following tariff implementations

The market remains volatile, with experts suggesting potential movement between 23,300 and 24,000 levels in the coming sessions.

Source: Hindustan Times, Moneycontrol, Upstox, Reuters