By Vivek Kumar M
(Reuters) -India’s stock benchmarks tumbled more than 1% in early trades on Friday amid broad-based selling due to escalating concerns about a full-fledged global trade war and a slowing U.S. economy.
The Nifty 50 and the BSE Sensex were both down 1.2% at 22,271.40 and 73,742.99, respectively, as of 10:07 a.m. IST.
All the 13 major sectors declined, while the broader, small-cap and mid-caps indexes slid around 2% each.
The MSCI Asia ex-Japan index sank 2% after U.S. President Donald Trump said that the 25% duties on imports from Canada and Mexico would come into effect on March 4 and not April 2 as he had suggested the day prior.
Trump also proposed additional 10% tariffs on China, heightening fears of an escalating trade conflict. [MKTS/GLOB]
The market had not discounted a full-blown trade war between the U.S. and China and the element of uncertainty has increased after the latest tariffs announcement, said VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Heavyweight information technology stocks and financials, where foreign investors have substantial holdings, contributed to half the Nifty 50’s losses on the day.
The IT index tumbled 4% as data showed that U.S. weekly jobless claims rose more than expected last week, adding to worries that the world’s largest economy may be slowing, with inflation expectations surging due to Trump’s tariffs.
The IT index has dropped nearly 8% so far this week, compared to a fall of just over 2% in the Nifty 50.
Financials were down around 0.5% on the day, with 17 of its 20 constituents trading lower.
The Nifty 50 has fallen around 5% so far in February and is on course for the fifth consecutive month of losses, its longest losing streak in 29 years.
(Reporting by Vivek Kumar M; Editing by Mrigank Dhaniwala and Savio D’Souza)
