Investors should closely monitor potential retaliatory measures from the European Union and other nations in response to the reciprocal tariffs imposed by U.S. President Donald Trump, experts warned on Monday. The caution came as Indian stock markets witnessed a sharp decline, triggered by a broader global sell-off fueled by escalating trade tensions.

Economist Pankaj Jaiswal told IANS, “The world is in reset mode for the first time since World War II, due to which stock markets globally, including India, have fallen drastically.”

“There is a risk of recession and inflation across the globe due to the trade war, and the US will be the most affected by this,” he added.

Market expert Sunil Shah, speaking to IANS, said that about a 4 per cent decline in the Indian stock market was triggered by the 34 per cent tariff imposed by China in retaliation to the US tariffs.

Shah stated, “Investors know that no country is going to benefit from the US tariffs, and this is the core reason why the world’s major markets crashed today.”

Selling pressure was seen across most Asian markets. Tokyo, Shanghai, Bangkok, Seoul, and Hang Seng indices fell by up to 11 per cent.

US markets also witnessed a massive sell-off on Friday due to reciprocal tariffs. The Dow closed down by 5.50 per cent, while the technology-heavy Nasdaq dropped nearly 5.82 per cent.

Meanwhile, Indian stock markets extended their losses for a third straight session on Monday, following a global sell-off fueled by escalating trade war fears.

The decline is attributed to the reciprocal tariffs imposed by US President Donald Trump, which have significantly heightened the risk of a global trade war.

Oil prices have also plunged amid global uncertainties, especially after Saudi Arabia issued its biggest price cut on the commodity in years. Brent crude slipped 2.67 per cent to $63.82 a barrel, while West Texas Intermediate fell 2.69 per cent to $60.31.

(Inputs from IANS)