Equity benchmark indices declined sharply on Tuesday, led by IT and real estate stocks, as concerns over US President Donald Trump’s proposed reciprocal tariffs spooked the investors.
Sensex tanked 1,390.41 points or 1.8 percent to settle at 76,024.51 as 28. During the day, the index plummeted 1,502.74 points or 1.94 percent to 75,912.18. The NSE Nifty dropped 353.65 points or 1.5 percent to 23,165.70.
Infosys, Tata Consultancy Services, Bajaj Finance, HDFC Bank, Axis Bank, Bajaj Finserv, HCL Tech, and Maruti were among the biggest losers.
Key Factors Dragging the Market Lower
1) Trump’s Reciprocal Tariff Plan: Market sentiment took a hit ahead of the expected rollout of Trump’s reciprocal tariffs on April 2, which he termed "Liberation Day" for the US. The president has already imposed levies on key trade partners, including Canada, Mexico and China and is considering additional tariffs on automobiles, steel, aluminium, copper, pharmaceuticals, semiconductors and lumber.
"Markets globally are awaiting details of Trump’s reciprocal tariffs. The actual impact on various sectors and countries will only be clear after the announcement," said V K Vijayakumar, Chief Investment Strategist, Geojit Investment Services.
2) Surge in Crude Oil Prices: Brent crude, the global oil benchmark, jumped 1.51 percent to $74.74 per barrel, raising concerns over India's import bill. Rising crude prices typically hurt domestic markets as India is a major importer of oil.
3) Recession Risks in US: Goldman Sachs increased the probability of a US recession to 35 percent from its earlier estimate of 20 percent, citing the potential economic impact of Trump's tariffs. The brokerage also warned of a possible technical recession in the European Union, which could further weigh on global investor sentiment.
4) FII Selling Resumes: Foreign institutional investors (FIIs) turned net sellers in Indian equities after a brief buying streak. According to exchange data, FIIs offloaded equities worth Rs 4,352.82 crore on Friday, adding to the pressure on domestic markets.
5) Profit Booking After Recent Rally: After gaining nearly 5.4 percent over the past eight sessions, both the Nifty and Sensex turned positive for the year. The sharp rise in valuations over a short period has also made some traders cautious, triggering a sell-off in heavyweight stocks. "India outperformed most markets in March with a 6.3% return," Vijayakumar noted, adding that profit-booking at higher levels was expected.
The fear gauge index, or India Vix rose 10 percent to 13.97 in trade today.
Technical View
Anand James, Chief Market Strategist at Geojit Investments, said, "We need a decisive move above 23,700-23,750 for the market to regain strength. Otherwise, we may see sideways trading with a downward bias, aiming for 23,300. A breakout beyond the 23,750-23,300 range could trigger a directional move of at least 250 points."
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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