Bears regain control as Sensex falls 450 pts, Nifty slips to 22,350; US recession fears among key factors weighing on D-Street

Benchmark equity indices slipped sharply on Tuesday as investors turned cautious amid renewed global recession fears and rising trade tensions.

Sensex fell 451.57 points or 0.6 percent to an intraday low of 73,663.60, while the NSE Nifty lost 145.6 points or 0.64 percent to touch 22,314.70.

Heavy selling was seen across key sectors, with Nifty bank, IT and consumer durables dragging the markets lower. Of the 13 major sectoral indices, only FMCG, pharma and realty managed to stay in positive territory.

Market sentiment was hit by a sharp sell-off on Wall Street overnight, as concerns over a potential recession in the United States intensified. President Donald Trump’s cautious stance on recession fears, coupled with escalating tariff disputes, added to the uncertainty.

Key Factors Behind Market Decline

1) US Recession Fears: Investor sentiment was rattled by fears of a slowdown in the world’s largest economy. US stocks tumbled on Monday, with the S&P 500 recording its biggest one-day drop since December 18 and the Nasdaq plunging 4 percent, its worst single-day fall since September 2022.

A spike in US bond yields, a stronger Japanese yen, and weaker consumer spending further heightened concerns. "Uncertainty over trade policies and tariff hikes is now reflecting in US stock markets, with a looming recession by year-end," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

2) Weakness in Asian Markets: Asian markets followed Wall Street’s negative trend, with the Hang Seng index falling nearly 1 percent and South Korea’s Kospi shedding up to 1.5 percent. Investors remained wary of the economic impact of trade policy changes in the US, prompting risk aversion in Asian equities.

3) Tariff Uncertainty: The US government’s decision to impose a 25 percent tariff on steel and aluminium imports from Wednesday raised concerns over potential retaliatory measures by major trade partners. Market experts warned that countermeasures on Indian exports, expected to come into effect in April, could impact multiple industries.

Technical View:

Analysts pointed to key levels on the Nifty that could determine the near-term market direction. "We had expected downside targets near 22,245, with 22,470 acting as an interim pivot. The selling pressure was arrested around 22,470, but downside momentum could persist. If the 22,350-22,300 zone holds firm, a recovery is possible. However, failure to breach 22,520 on the upside or a fall below 22,245 could accelerate declines towards 21,720,” said Anand James, Chief Market Strategist, Geojit Financial Services.

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