Carnage on D-St: Bears drag Nifty under 21,900, Sensex dives 3,000 points; India VIX spikes 65%

Analysts and market experts are suggesting that investors should 'wait and watch' as the tariff narrative plays out.

The Indian markets crumbled four percent in trade, extending losses from the morning session on April 7, as the global sell-off was echoed in the domestic benchmarks. The 12 month returns for Nifty 50 and Sensex turned negative, with the markets wiping off all gains made in the month of March.

The markets are hit with heightened uncertainty amid U.S. President Donald Trump's tariffs, which have caused turbulence across international stock exchanges. However, the President refused to back down from his stance, calling the sour market sentiment 'medicine' that needs to be taken.

At 12:30 pm, the Sensex was down 3,331.07 points or 4.42 percent at 72,033.62, and the Nifty was down 1,075.90 points or 4.70 percent at 21,828.55. About 266 shares advanced, 3262 shares declined, and 104 shares unchanged. The fall in the Indian markets has caused Rs 16 lakh crore to be wiped off in wealth.

Uncertainty spiked sharply, measured by the fear gauge India VIX, which zoomed 57 percent to 21.71 amid volatility.

All fifty Nifty 50 constituents traded in the red, with Tata Group players Tata Steel, Tata Motors, and Trent falling up to 20 percent in trade.

During the session, bulls and bears continued their tussle over the key 22,000 mark on the Nifty 50. Maintaining this level is essential for the index to find stability, as a close below this mark could pave the way for bears to drag the index to 21,500 levels, said experts.

"These levels could potentially act as reversal points, offering buying opportunities if supported by favorable price action. On the upside, 23,000 acts as the immediate resistance level. A sustained move above this mark could pave the way for further upside toward 23,100 and 23,400," said Hardik Matalia, Derivative Analyst, Choice Broking.

All the sectoral indices traded in the deep red, with the metals, IT and media indices dragging the pack.

Global markets were also trading with sharp cuts. Trading in Taiwan was halted after its benchmark hit the circuit breaker limit, while Japan's Nikkei 225 sank 8.5 percent, extending gains to enter a bear markets. Hong Kong's Hang Seng crashed 12 percent, while China's Shanghai Composite fell 8.5 percent.

As a result, analysts are suggesting that investors should 'wait and watch' as the tariff narrative plays out. As volatility skyrockets, Kranthi Bathini, Equity Strategist at WealthMills Securities, state that the tremors felt across markets is completely unprecedented.

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