As concerns about a possible recession were heightened by US President Trump’s reciprocal tariffs, which prompted the Nifty Bank index to lose more than 3% in early trade on April 7, banking equities dropped in harmony with the market’s carnage.

US President Mr. Donald Trump introduced a number of tariffs on several nations, consisting of a 26% levy on all of the exports from India to the US. As some countries have responded with counter-attacks on trade measures, economic experts have expressed cautiousness about a possible global trade war.

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As per Mr. Vinod Nair, Head of Research at Geojit Investments, “The recent implementation of higher-than-anticipated US tariffs has had a significant impact on global markets, triggering a bearish trend as investors assess broader implications. The likelihood of retaliatory measures against the US has further heightened uncertainty. US bond yields and oil prices are trending downward, reflecting concerns over potential economic slowdown and increased recessionary risks.

The shares of Canara Bank and Kotak Mahindra Bank fell more than 4% in morning trading, making them the biggest losers on the Nifty Bank index. In the meantime, shares of Axis Bank, IDFC First Bank, Bank of Baroda, and IndusInd Bank were down around 4%.  The shares of industry heavyweights State Bank of India (SBI) and ICICI Bank also fell precipitously, by more than 3%, which greatly exacerbated the index’s decline.

The share prices of ICICI Bank and HDFC Bank were among the leading causes of the decrease in the Nifty Bank index, and HDFC Bank, another heavyweight, was trading about 3% down.

Shares of Federal Bank, AU Small Finance Bank, and Punjab National Bank (PNB) were trading in the deep red with significant losses.

To Summarize

On April 7, banking stocks took a big hit, with the Nifty Bank index dropping over 3% amid rising global recession fears triggered by US President Trump’s aggressive tariff policies. The US imposed a 26% tariff on not only Indian exports, prompting retaliatory actions from other nations but also sparking concerns over a global trade war.