Sensex Crashes Over 600 Points as Metal Stocks Plunge Amid Trump Tariff Fears

Indian stock markets extended their losses on February 10 as foreign investors continued to exit, offloading ₹10,179 crore worth of equities amid a stronger U.S. dollar and rising Treasury yields. The rupee weakened further, hitting a record low of ₹87.92 per dollar, adding to market concerns. Metal stocks were among the worst hit after former U.S. President Donald Trump announced a 25% tariff on steel and aluminum imports, causing companies like Tata Steel, SAIL, and Vedanta to tumble 3-4%.

The broader selloff affected all 13 major sectoral indices, with the BSE Midcap and Smallcap indices falling over 2%, while market volatility surged as India VIX jumped 6% to 14.5. Investors are now looking ahead to the release of inflation data from India and the U.S. on February 12 for further market direction.

CONTENTS:

• Indian Stock Markets Slide as Metal Stocks Lead Broad Sell-Off
• Sensex Sinks Over 600 Points: Three Key Reasons Behind Market Decline

Sensex Crashes Over 600 Points as Metal Stocks Plunge Amid Trump Tariff Fears

Indian Stock Markets Slide as Metal Stocks Lead Broad Sell-Off

Sensex Crashes Over 600 Points as Metal Stocks Plunge Indian stock markets extended their losses on February 10, with all 13 major sectoral indices trading in the red, led by a sharp decline in metal stocks. The BSE Metal index plummeted nearly 3% following former U.S. President Donald Trump’s February 9 statement, in which he vowed to impose a 25% tariff on steel and aluminum imports, in addition to existing levies.

The broader market suffered the most, as both the BSE Midcap and BSE Smallcap indices dropped over 2%, underperforming the benchmark indices. At 12:50 PM, the Sensex was down 640 points (0.8%) at 77,223, while the Nifty 50 slid 197 points (0.8%) to 23,360. Market volatility spiked, with the India VIX surging over 6% to 14.5.

Trade tensions escalated as Trump’s proposed tariffs raised concerns about potential retaliatory measures. Meanwhile, reports indicate that Indian Prime Minister Narendra Modi is considering tariff concessions to ease negotiations with the U.S. and avoid a trade conflict.

The sell-off was broad-based, with financials, oil and gas, and metal stocks leading the declines. All 15 stocks in the BSE Metal index, including Tata Steel, SAIL, and Vedanta, saw losses of 3-4%. Among the worst performers were Trent, Tata Steel, Power Grid, Bajaj Finance, and ONGC, slipping between 2-4%. However, stocks such as Britannia, Tata Consumer, Kotak Mahindra, Bharti Airtel, and Wipro managed modest gains of 0.3-1.4%.

Foreign investors continued to exit Indian equities, offloading ₹10,179 crore worth of shares in February so far. Analysts attributed this to a stronger U.S. dollar and rising Treasury yields, which have reduced the attractiveness of emerging markets. The rupee also weakened, hitting a record low of 87.92 per dollar, weighed down by global uncertainties and the fresh tariff concerns.

Market experts expect continued volatility until there is more clarity on U.S. tariff policies and potential global responses. Investors are now looking ahead to the release of inflation data from both India and the U.S. on February 12, which could provide further market direction.

Sensex Sinks Over 600 Points: Three Key Reasons Behind Market Decline

Sensex Crashes Over 600 Points as Metal Stocks Plunge Indian stock markets opened lower on Monday and extended losses as selling pressure mounted. Despite the Reserve Bank of India’s (RBI) rate cut and the Bharatiya Janata Party’s (BJP) electoral victory in Delhi, investor sentiment remained weak.

The BSE Sensex plunged over 600 points, while the NSE Nifty dropped nearly 200 points in early trade. The Sensex hit an intraday low of 77,189.04 after closing at 77,860.19 in the previous session. As of 10:30 AM, the Sensex was down 579.15 points at 77,281.04, while the Nifty50 declined 177.90 points to 23,382.05.

Factors Driving the Market Selloff

1. Foreign Investor Selloff Despite RBI Rate Cut

According to Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, foreign investors continued to offload Indian equities, adding to the downward pressure. He noted that recent policy decisions, including the RBI’s rate cut and the Union Budget, have failed to attract foreign portfolio investors. Additionally, weak earnings momentum in the short to medium term has dampened market sentiment.

Despite the current volatility, Bathini believes that as long as the Nifty remains above 23,000, the broader market trend remains positive in the medium term.

2. Rupee Hits Record Low

The Indian rupee weakened further on Monday, hitting an all-time low amid concerns over potential U.S. trade tariffs. In early trading, the rupee fell to 87.95 per U.S. dollar, surpassing last week’s record low of 87.58. As of the latest update, it was trading at 87.93, down 0.6% for the day.

A depreciating rupee raises import costs, especially for crude oil, and can negatively impact foreign investment inflows. Market participants believe that if the slide continues, the RBI may intervene to stabilize the currency.

3. Metal Stocks Lead Market Decline

Metal stocks suffered heavy losses after former U.S. President Donald Trump announced a fresh round of tariffs on steel and aluminum imports. Speaking aboard Air Force One, Trump confirmed that a 25% tariff would be imposed on all such imports, adding to existing duties. The official announcement is expected later today, with implementation likely to follow soon.

The announcement triggered a selloff in Indian metal stocks. The Nifty Metal index plunged 2.94%, with major companies witnessing steep declines:

• Vedanta Limited fell 4.61%
• Steel Authority of India (SAIL) dropped 4.16%
• Tata Steel declined 3.48%
• JSW Steel slid 3.04%
• National Aluminium Company lost 2.90%
• NMDC fell 2.88%
• Jindal Steel & Power declined 2.35%

Investors fear that these new tariffs will reduce demand and exert pricing pressure on metal companies, affecting their profitability.

What’s Next for the Markets?

Sensex Crashes Over 600 Points as Metal Stocks Plunge The BJP’s victory in the Delhi Assembly elections—winning 48 out of 70 seats—was initially expected to bring some stability to market sentiment. However, global economic uncertainties and persistent foreign investor outflows have overshadowed its impact.

Analysts at Motilal Oswal Financial Services (MOFSL) suggest that while the election results indicate political stability, market focus will soon shift to corporate earnings, company outlooks, and global economic conditions. Given the ongoing uncertainty over U.S. trade policies and foreign investor sentiment, markets are expected to remain volatile in the near term.