SENSEX recovers after sliding 797 pts; NIFTY50 tests 24,600; top factors why market is falling

The S&P BSE SENSEX plunged as much as 796.75 points, or 0.97%, while the NSE's NIFTY50 index slipped as much as 224.55 points, or 0.9%, in the early trade.

However, the market saw some recovery later. Last seen, the BSE SENSEX was trading at 80,981.98, down 469.03 points, or 0.58%. The NSE's NIFTY50 index was trading over 24,600 levels.

Trump's fresh salvos

Investor sentiment got a hit as on May 30, Trump announced that he would double the existing 25% tariffs on steel and aluminium imports from June 4. This hike comes under Section 232 of the US Trade Expansion Act of 1962, a law that allows the president to impose tariffs or other trade restrictions if imports are deemed a threat to national security.

Trump originally invoked this provision in 2018 to set the 25% tariff on steel and 10% on aluminium. The president raised tariffs on aluminium to 25% in February 2025.

This announcement will disrupt global trade significantly, as per experts.

Doubling tariff on steel and aluminium to disrupt India's metal exports

US President Donald Trump's announcement to double tariffs on imported steel and aluminium will impact Indian exporters, particularly those engaged in value-added and finished steel products and auto components, experts say.

Expressing concern over the Trump administration's move, they said the Indian government should take up the matter bilaterally with the US authorities.

For India, the consequences are direct, the Global Trade Research Initiative (GTRI) said.

In 2024-25, India exported USD 4.56 billion worth of iron, steel, and aluminium products to the US, with key categories including USD 587.5 million in iron and steel, USD 3.1 billion in articles of iron or steel, and USD 860 million in aluminium and related articles.

"These exports are now exposed to sharply higher US tariffs, threatening the profitability of Indian producers and exporters," GTRI founder Ajay Srivastava said.

Weak Asian Markets

Asian stock markets and the US dollar were cautious on Monday as US-China trade tensions continued to simmer. Besides, conflict between Russia and China also weighed on the sentiment.

Speaking on Sunday, Treasury Secretary Scott Bessent said Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals.

Beijing then forcefully rejected Trump's trade criticism, suggesting a call might be some time coming.

Besides, White House officials also continued to play down a court ruling that Trump had overstepped his authority by imposing reciprocal tariffs on imports from US trading partners.

"The court ruling will complicate the path ahead on trade policy, but there remains an ample set of provisions available to the administration to deliver its desired results," said Bruce Kasman, chief economist at JPMorgan.

Global stocks were listless also because of the fresh conflict between Russia and Ukraine.

According to a report by AP, Moscow pounded Ukraine with missiles and drones just hours before a new round of direct peace talks in Istanbul, and a Ukrainian drone attack destroyed more than 40 Russian planes deep in Russia's territory.

Another reason why the market is testing the waters is the release of US jobs data.

Reuters reported that a rise in unemployment is one of the few developments that could get the Federal Reserve to start thinking of easing policy again, with investors having largely given up on a cut this month or next.

Further, news reports say that the European Central Bank (ECB) will almost certainly cut interest rates on June 5, with a more than 70% majority of economists polled by Reuters expecting policymakers to pause for the first time in a year in July despite a weak economy at risk from the US-led trade war.

These events are keeping market participants on tenterhooks.

Rise in crude oil prices

Oil prices bounced after OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, a relief to some who had feared an even bigger increase.

Brent rose $1.60 to $64.38 a barrel, while US crude gained $1.74 to $62.53 per barrel, per a Reuters report.

Fall in index heavyweights

Headline indices slipped in the red as most blue-chip counters witnessed selling pressure. HDFC Bank was the biggest contributor to the SENSEX's fall, followed by RIL, ICICI Bank, and Infosys.