Equity markets witnessed a sharp sell-off on Friday, with benchmark indices falling over one percent, as global sentiment turned sour following reciprocal tariff announcements by US President Donald Trump and fears of the global trade war.
BSE Sensex tumbled 930.67 points or 1.22 percent to settle at 75,364.69. During the day, it plummeted 1,054.81 points or 1.38 percent to hit an intraday low of 75,240.55.
The broader NSE Nifty declined 345.65 points or 1.49 percent to close at 22,904.45. In the session, it dropped 382.2 points or 1.64 percent to 22,867.90.
Markets came under heavy selling pressure, particularly in IT, pharma and metal counters, tracking global weakness after Trump unveiled reciprocal tariffs on about 60 countries, including India.
Tata Motors, Tata Steel, Larsen & Toubro, Maruti Suzuki India, IndusInd Bank, Infosys, HCL Technologies, NTPC, Tech Mahindra, Sun Pharmaceutical Industries and Adani Ports were among the laggards.
Here are the key factors behind the market decline today
1) Fears of global trade war: The latest reciprocal tariffs by the United States has stoked fears of a full-blown trade war, with China and Canada vowing countermeasures, adding to the nervousness among investors.
"Markets are going through heightened uncertainty which is likely to persist. A global trade war has been triggered by the US, and retaliatory tariffs from China, the EU and others are now expected. This will prolong volatility and hurt global growth," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The US administration announced a 26 percent tariff on Indian goods, along with a 10 percent baseline duty on imports from other nations. In retaliation, Canada imposed a 25 percent tariff on a wide range of US vehicles, while China demanded immediate withdrawal of the new duties and warned of firm counter steps.
According to HDFC Securities' Head of Prime Research Devarsh Vakil, Wall Street benchmarks slumped on Thursday, ending with the largest one-day percentage losses in years, as US President Donald Trump's sweeping tariffs ignited fears of an all-out trade war and a global economic recession.
2) Negative global cues: Overnight, US stocks witnessed one of the sharpest declines since 2020, with the S&P 500 sliding 4.9 percent and the Nasdaq 100 crashing 5.5 percent. Nearly $2.5 trillion in market value was wiped out.
The ripple effect was visible across Asian markets, where Tokyo's Nikkei was trading more than 3 percent lower, and Seoul's KOSPI went down by nearly 2 percent. Shanghai and Hong Kong stock markets remained closed on the occasion of Qingming festival.
3) Sectoral drag: All the 13 major sectoral indices on NSE traded in the red. Pharma stocks were under pressure after President Trump hinted at potential tariffs on pharmaceutical products, saying his administration was looking at the sector “as a separate category” and could make an announcement “in the near future”.
IT shares extended their losing streak, tracking the weakness in US tech stocks. The Nifty IT index fell over 2 percent, with all 10 constituents in the red. Coforge and Persistent Systems were the top losers.
Metal shares also bore the brunt, amid concerns over rising trade barriers.
4) Relentless FII Selling: The continued foreign fund outflows have also dented the investor sentiment after a brief lull. FIIs offloaded equities worth Rs 2,806 crore on Thursday, while Domestic Institutional Investors (DIIs) purchased shares worth Rs 221.47 crore on a net basis.
5) Investors jittery ahead of RBI MPC, Powell Speech: Investors will be awaiting US Federal Reserve Chair Jerome Powell's speech on Friday regarding his latest assessment of the US economy and any clues on the policy outlook following Trump's fresh tariff salvo. RBI MPC will also meet next week to announce the repo rate.
The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) is likely to cut repo rate by 25 basis points (bps) in the upcoming monetary policy on April 9, according to Moneycontrol’s poll of 21 economists, treasury heads and fund managers.
Technical view
Shrikant Chouhan, Head of Equity Research at Kotak Securities, said the market showed signs of indecision.
“After a gap-down opening, the market took support near 75,800 (Sensex) and 23,150 (Nifty), but failed to cross the key resistance zone of 77,000/23,350. This suggests a lack of clear direction in the near term. If the indices breach the support levels of 75,800 and 23,150, we may see further downside towards 75,300/23,000 or even lower,” Chouhan said.
He added that any rebound above 77,000/23,350 may take the indices towards 77,800/23,600, but such a move would need strong buying support, which currently seems lacking.
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.
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