A STUDY ON IMPACT OF GLOBAL EVENTS AND TRADE WARS ON SECTORAL PERFORMANCE OF THE INDIAN STOCK MARKET

Abstract

Global financial markets have become increasingly interconnected, making domestic stock markets more vulnerable to international economic and political developments. In recent years, global events such as geopolitical conflicts, pandemics, trade disputes, and monetary policy shifts have significantly influenced the performance and volatility of financial markets across the world. The Indian stock market, being one of the largest emerging markets, is particularly sensitive to such external shocks due to growing globalization, capital mobility, and trade integration. This study examines the impact of major global events and trade wars on the performance of the Indian stock market, with a specific focus on sectoral indices. The research analyses how different sectors of the Indian economy respond to global uncertainties and disruptions in international trade. Key global events such as the US–China trade war, the Russia–Ukraine conflict, global monetary tightening, and recent geopolitical tensions including Iran–USA conflicts (2025–2026) have been considered to evaluate their influence on market behaviour. The study utilizes sectoral indices including banking, information technology, pharmaceuticals, metals, automobiles, and FMCG to understand sector-specific responses. Quantitative methods such as event analysis, volatility assessment, and regression techniques are applied to examine the relationship between global shocks and stock market movements. The findings of the study aim to provide insights into how international developments shape investor sentiment and market performance in India. Understanding these relationships can help investors, policymakers, and financial institutions better manage risks associated with global economic uncertainties.