Nifty, Sensex stare at gap-down open amid global risk-off sentiment following Trump's tariffs; check key levels to watch

About $2.5 trillion was wiped out from Wall Street overnight.

Frontline indices Nifty 50 and Sensex are likely to see a gap-down open in trade on April 4, tracking negative global cues, as U.S. President Donald Trump's imposition of reciprocal tariffs sent fears of a global trade war skyrocketing.

About $2.5 trillion was wiped out from US stocks after the S&P 500 declined 4.9 percent and the Nasdaq 100 slumped 5.5 percent on April 3, the biggest drop since 2020 for each. Oil sold off and the greenback extended its drop on Friday as yields on the 10-year US Treasury hovered around the closely watched 4 percent mark.

Asian indices fell to the lowest level in two months, extending a global selloff in stocks after President Donald Trump’s latest tariff measures drove investors into haven assets. Japanese shares sank to the lowest level since August, while South Korean indices traded with a negative bias.

At 7.30 am, the GIFT Nifty index was half a percent lower, just below the 23,200 mark. Further, in the previous session, after seeing heavy losses on open, the markets pared some losses to closed muted. At close, the Sensex was down 322.08 points or 0.42 percent at 76,295.36, and the Nifty was down 82.25 points or 0.35 percent at 23,250.10.

For the domestic indices, the sentiment is likely to be negative in trade, as Trump's reciprocal tariffs imposed overnight were more severe than expected.

"Despite U.S.-imposed tariffs, the Nifty index held its ground, staging a resilient rebound from its support levels. However, while a recovery was observed, intraday volatility remained subdued, keeping traders cautious. Buyers managed to retain dominance throughout the session, with every minor dip being quickly absorbed. Yet, the index continued to oscillate within a well-defined range, creating a stiff resistance ceiling and a strong base, reflecting a lack of decisive direction in the market," said Dhupesh Dhameja, Derivatives Research Analyst, SAMCO Securities.

On a technical basis, the Nifty 50's RSI remains below 60, indicating a lack of bullish momentum. This setup points toward a continued consolidation phase, where key support and resistance levels dictate the price action.

On the downside, support has shifted to the 23,100–23,000 zone, aligning with the 20 & 50-day EMAs, reinforcing this area as a critical demand zone, noted Dhameja.

A sustainable move above the hurdle of 23,350 could change the trend and pull the Nifty towards the next overhead resistance of around 23,650 levels in the near term, Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities said.

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