Banking shares drag Nifty Bank lower by 3% as Trump tariffs trigger recession fears

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26 Aug, 2025 12:21

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Banking shares fell on April 7, tracking the bloodbath in the overall market as US President Trump's reciprocal tariffs raised concerns of a possible recession, sending the Nifty Bank index down over 3 percent in early trade.

US President Trump introduced a slew of tariffs on multiple countries, with India being charged 26 percent on all its exports bound for America. Experts have raised fears of a global trade war as some nations have retaliated with counter-measures.

Vinod Nair, Head of Research at Geojit Investments said, "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."

Kotak Mahindra Bank shares were the top losers on the Nifty Bank index, tumbling over 4 percent. Heavyweights HDFC Bank, ICICI Bank and Axis Bank meanwhile ended the session over 3 percent lower each. Canara Bank shares also closed nearly 3 percent lower.

The fall in the share prices of ICICI Bank and HDFC Bank were the top contributors to the downturn in Nifty Bank index.

State Bank of India (SBI), Federal Bank, IDFC First Bank and Bank of Baroda shares dropped over 2 percent each. Punjab National Bank (PNB), AU Small Finance Bank and IndusInd Bank shares also closed in the red.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.