Indian Markets Slump for Fifth Consecutive Day Amid Trade Tensions

Indian shares tumbled Thursday as mixed signals on U.S.-India trade relations and Federal Reserve interest rate uncertainty weighed heavily on investor sentiment. The benchmark BSE Sensex plunged 555.95 points (0.68%) to 81,159.68, marking its fifth straight day of losses.

U.S. Energy Secretary Chris Wright's call for India to avoid Russian oil has created friction, even as Prime Minister Modi described Russia as a "time-tested partner" during his address at the UP International Trade Show. This diplomatic tightrope walk is clearly making markets nervous.

I'm particularly concerned about Modi's emphasis on self-reliance and "Make in India" initiatives. While admirable in theory, the timing feels reactive rather than strategic, especially with foreign funds fleeing Indian markets. The H-1B visa fee hike controversy isn't helping matters either.

Trump's administration launching new investigations into imports of robotics, industrial machinery, and medical devices signals potential tariff expansion - another headwind for Indian exporters. The broader NSE Nifty fell 166.05 points (0.66%) to 24,890.85, with mid-cap and small-cap indexes dropping 0.7% and 0.8% respectively.

Market breadth looked terrible - 2,700 declining shares versus just 1,478 advances on the BSE. Power Grid Corp and Trent were hammered, both sinking over 3%. Tata Motors dropped 2.7% following reports that JLR's potential £2 billion cyberattack bill could exceed their entire FY25 profit. With persistent foreign outflows, I'm not convinced we've seen the bottom yet.