Sensex, Nifty Extend Losses For Fifth Day On Trade War Fears

(RTTNews) - Indian shares tumbled on Tuesday after U.S. President Donald Trump imposed 25 percent tariffs on all U.S. imports of steel and aluminum, stoking fears of a trade war and potential inflation.

Concerns over ongoing foreign fund outflows, signs of slowing corporate earnings growth and geopolitical tensions involving Israel and Hamas also weighed on markets.

There is a lot of uncertainty over the U.S. trade war after retaliatory Chinese duties on U.S. energy and some goods came into effect on Monday.

Trump is expected to announce reciprocal tariffs on Tuesday or Wednesday in his ongoing effort to overhaul the U.S. trading relationship with the rest of the world. Higher oil prices also weighed on market after Trump told Hamas to free all Israeli captives by noon Saturday or he would propose cancelling the Israel-Hamas ceasefire and letting "all hell break loose".

The benchmark S&P/BSE Sensex hit an intraday low of 76,030.59 before recovering some ground to end the session down 1,018.20 points, or 1.32 percent, at 76,293.60.

The broader NSE Nifty index closed down 309.80 points, or 1.32 percent, at 23,071.80, after having hit a low of 22,986.65 earlier.

The BSE mid-cap and small-cap indexes fell 2.9 percent and 3.4 percent, respectively. The market breadth was extremely negative, with 3,475 shares declining while 527 shares advanced and 95 shares ended unchanged.

Among the prominent decliners, BEL, Coal India, Shriram Finance, Apollo Hospitals Enterprise and Eicher Motors plummeted 3-7 percent.

The rupee rallied the most in nearly two years, closing 0.7 percent higher at 86.8275 against the dollar, possibly due to an intervention by the Reserve Bank of India (RBI).

Despite today's rebound, the rupee remains Asia's worst-performing currency this year, with nearly $9 billion in outflows from Indian equities.