The escalating tensions between Beijing and Washington sent shivers through financial markets, as investors foresaw dire consequences for the global economy if trade barriers start going up.
Benchmark indices on Friday witnessed a massive decline over global trade war fears.
The escalating tensions between Beijing and Washington sent shivers through financial markets, as investors foresaw dire consequences for the global economy if trade barriers start going up.
At 9:50 AM, Sensex was down 386.04 points to trade at 32,619.61 while Nifty fell 128.30 points to trade at 9,991.75.
Below, we have listed the 10 reasons explaining what went wrong in the market.
1. US President Donald Trump's plans for tariffs on up to $60 billion in Chinese goods brought the world's two largest economies closer to a trade war.
2. Trump is planning to impose the tariffs over what his administration says is misappropriation of US intellectual property. A probe was launched last year under Section 301 of the 1974 US Trade Act.
Responding the US import tariffs on steel and aluminium that went into effect on Friday, though announced by Trump earlier this month, China unveiled plans to levy additional duties on up to $3 billion of US imports including fresh fruit, wine and nuts.
3. China urged the United States on Friday to "pull back from the brink"
4. Investors fear that the U.S. measures could escalate into a trade war, with potentially dire consequences for the global economy. MSCI's broadest index of Asia-Pacific shares outside Japan fell 2.1 percent as stocks across the region dropped.
Shanghai shares were down 3.2 percent. Australian stocks lost 2.0 percent and Japan's Nikkei dropped 3.5 percent. Hong Kong's Hang Seng was down nearly 3.0 percent, Taiwan shares slid 1.7 percent and South Korea's KOSPI retreated 2.2 percent.
5. Stock markets slid and perceived havens such as government bonds and the yen gained on Friday as investors rushed to safety after U.S. President Donald Trump announced long-promised tariffs on Chinese goods, stoking fears of a global trade war.
(With inputs from Reuters)
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