SENSEX plunges over 1,000 points: Top factors behind market crash on Tuesday

The equity benchmark indices on Tuesday continued their free fall as investors remained worried about the ongoing trade tariff from the US.

At close, the S&P BSE SENSEX stood at 76,293.60, plunging 1,018.20 points, or 1.32%, while the NSE's NIFTY50 index ended at 23,071.80, down 309.80 points, or 1.32%.

During the day's trade, the S&P BSE SENSEX was trading at 76,184.18, falling 1127.62 points, or 1.46%, while the NSE's NIFTY50 index was trading at 23,032.10, losing 349.50 points, or 1.49%.

Fresh tariffs

US President Donald Trump raised tariffs on steel and aluminum imports to a flat 25% "without exceptions or exemptions" in a move he hopes will aid the struggling industries in the US but which also risks sparking a multi-front trade war.

The US will also announce plans to impose reciprocal tariffs on other countries over the next two days.

Trump on Tuesday agreed to consider a tariff exemption on Australian steel and aluminum imports after a telephone call with Australia's prime minister. Prime Minister Anthony Albanese argued for an exemption during the call, which was scheduled before Trump announced tariffs on steel and aluminum imports on Monday.

Trump said the United States trade surplus with Australia was one of the reasons he was considering an exemption from the tariffs.

Meanwhile, the European Union on Tuesday vowed that US tariffs 'will not go unanswered' and will trigger countermeasures.

Broader market under pressure

The BSE Midcap and Smallcap indices lost over 3% during the intraday trade as investors remain cautious due to tariff wars.

During intraday trade, the BSE Midcap stood at 40,873.47 level, losing 1,288.89 points, or 3.06% while the BSE Smallcap index tumbled 3.60% to 47,269.30 levels.

Global markets

The Dow Jones Industrial Average futures slid 82 points, about 0.18%. The S&P 500 futures and Nasdaq 100 futures respectively fell 0.28% and 0.36%.

Stocks in Asia were mostly down Tuesday after US President Donald Trump imposed 25% tariffs on all US imports of steel and aluminum.

Hong Kong's Hang Seng index declined 0.87% to 21,335.38, while the Shanghai Composite dipped 0.12% to 3,318.06. Japan markets were closed for a national holiday. Meanwhile, the S&P/ASX 200 in Australia remained largely unchanged and South Korea's KOSPI was up 0.71% to 2,539.05.

Foreign investors outflow

Foreign institutional investors (FIIs) continued to offloaded equities worth ₹2,463.72 crore in the capital markets on a net basis on Monday, according to exchange data.