Banking Stocks Tumble as Global Tariff Concerns Weigh on Market

Market Performance

On April 7, 2025, banking shares witnessed a sharp downturn, dragging the Nifty Bank index lower by over 3 per cent during early trading hours. The decline came amid heightened fears of a global economic slowdown following a fresh wave of tariffs announced by US President Trump. These tariffs have sparked concerns about a possible recession and a wider trade conflict, leading to a significant sell-off in financial stocks.

Main News

The market reaction followed the announcement that the US would impose new tariffs on various countries, including a 26 per cent levy on all exports from India to the United States. This move raised alarm about the potential onset of a trade war, with some countries reportedly preparing retaliatory measures.

Global market sentiment turned negative, as reflected in declining bond yields and falling crude oil prices. These signals point to growing investor apprehension about the possibility of an economic downturn.

Company Details

Several major banks saw their stock prices decline notably:

• Kotak Mahindra Bank and Canara Bank were among the most brutal hits, falling over 4 per cent during morning trading.
• Axis Bank, IDFC First Bank, Bank of Baroda, and IndusInd Bank also recorded losses close to 4 per cent.
• ICICI Bank and State Bank of India witnessed a drop of more than 3% in their share prices.
• HDFC Bank was trading nearly 3 per cent lower as well.

The combined fall in ICICI Bank and HDFC Bank shares significantly impacted the overall performance of the Nifty Bank index.

Other notable declines were observed in:

• Punjab National Bank (PNB)
• AU Small Finance Bank
• Federal Bank

All these stocks were trading deep in the red as market pressure mounted.

Summary

The Indian banking sector experienced a pronounced sell-off on April 7, driven by concerns over the economic fallout from newly imposed US tariffs. The financial stocks contributed heavily to the broader market weakness, with heavyweight banks leading the decline. The situation remains uncertain as investors monitor global trade developments and potential responses from affected countries.