Nifty, Sensex may open gap-down as Trump’s reciprocal tariffs fuel global sell-off; check key levels to watch

Following the tariff announcements, global sentiment soured, with Wall Street futures cracking over five percent in after-hours trading.

Domestic benchmarks Nifty 50 and Sensex are likely to see a gap-down start in trade on April 3, following the imposition of US President Donald Trump’s broad-based tariffs. Trump unveiled his tariff plan for several U.S. trade partners on April 2, touted as 'Liberation Day', which caused a sharp-sell off across global markets.

GIFT Nifty sank over one percent, which indicates a sour start for the domestic frontlines, as U.S. will now impose a "discounted" broad-based tariff of 26 percent on India.

The is half of 52 percent that India supposedly charges U.S., including currency manipulation and trade barriers. Further, the White House announced, that these tariffs are over a 10 percent base import duty slapped on all goods entering the United States of America.

A short-term downtrend may emerge, noted experts, as the domestic market is likely to interpret the announcement negatively.

However, in the previous session, the domestic markets settled in green. At close on April 2, the Sensex was up 592.93 points or 0.78 percent at 76,617.44, and the Nifty was up 166.65 points or 0.72 percent at 23,332.35.

“The market seems to be coming to terms about the outcome of Trump's tariff policy decision, and hence buying was evident across all the sectors,” said Prashanth Tapse, Senior VP (Research), Mehta Equities.

Nevertheless, despite the previous day’s gains, investor sentiment remains cautious. Based on the latest Open Interest (OI) data and FII activity, a negative undertone persists, noted Gaurav Garg, Lemonn Markets Desk. Going ahead, support for the Nifty is seen around 23,000, while 23,300 and above could pose as a near-term resistance, he added.

Furthermore, the weekly index expiry is likely to contribute to volatility in trade today. “We recommend a cautious stance and favor a hedged approach until there is greater clarity on the index’s next directional move. However, stocks continue to offer trading opportunities on both sides, and participants should position themselves accordingly,” Ajit Mishra – SVP, Research, Religare Broking said.

Also Read | Global markets, US futures crash on Trump's sweeping reciprocal tariffs; Dow Futures sink 1,000 points

Following the announcement of the tariffs, global sentiment soured, with Wall Street cracking over five percent in after-hours trading.

While Wall Street indices had closed the April 2 session in the green, after Trump's reciprocal tariffs were announced, the S&P 500 futures crashed 3.9 percent, and futures of Nasdaq-100 tanked 4.7 percent. Dow Futures plummeted over 1,000 points, falling 2.4 percent. Small-cap index Russell 2000 futures dropped over 4.9 percent, edging the index closer to bear-market territory.

Fears of a global trade war rippled through international stock exchanges, as Japan's benchmark Nikkei 225 and South Korea's KOSPI and Kosdaq indices crashed over four percent in the early session.

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