Markets in Mayhem: Major reasons behind the Global Stock Market crash

Global stock markets suffered a massive crash on Monday, triggered by escalating trade tensions, economic uncertainty and sector-wide losses. India’s Sensex plunged over 3000 points and the Nifty50 fell more than 5%, marking the worst trading day in nearly a year. Over Rs 19 lakh crore in market capitalization was wiped out in a single session.

Also Read: Sensex and Nifty crash as Trump tariffs trigger global sell-off 

The primary trigger was US President Donald Trump’s announcement of aggressive tariffs ranging from 10% to 50% on multiple countries including India. These protectionist policies sparked fears of retaliatory measures disrupting global trade flows and damaging investor confidence.

Markets across Asia and the West mirrored the panic. Japan’s Nikkei  dropped 7%, Hong Kong’s Hang Seng  plummeted 10.5%, and Nasdaq futures  fell 4%. This widespread sell-off shows the extent of global financial interdependence and panic-driven exits from riskier assets.

The crash also reflected growing  fears of a global recession. Investors flocked to safe-haven assets, pushing the 10-year US Treasury yield  down to 3.91%. Commodities tumbled, with Brent crude  falling 6.5% and  silver crashing 7.3%, amid fears of collapsing demand.

In India, the decline was across all sectors. The Nifty Metal Index crashed 8%, IT stocks fell 7%, and autos, real estate, and oil & gas sectors lost over 5%. Small-cap and mid-cap stocks plunged 10% and 7.3%, respectively, showing widespread distress.

Market volatility reached levels unseen since COVID. Experts suggest a “wait and watch” strategy, as uncertainty clouds future outlooks. While India’s exposure to US trade is limited, the global nature of this crisis means no economy is immune.

The situation remains fluid, with investors watching closely for global responses to what could be a turning point in international economic policy.