Sensex falls 550 pts from day's high, Nifty below 23,500: Tariff worries among key factors weighing on markets

Sensex falls 550 pts from day's high, Nifty below 23,500: Tariff worries among key factors weighing on markets

Benchmark indices Sensex and Nifty fell on March 28, dragged by IT and auto stocks as uncertainty over US reciprocal tariffs that are to be announced next week made investors cautious.

Sensex fell over 550 pts from day's high while Nifty went below the 23,500-mark.

At 13:16 hrs IST, the Sensex was down 327.13 points or 0.42 percent at 77,279.30, and the Nifty was down 97.35 points or 0.41 percent at 23,494.60. About 1559 shares advanced, 1883 shares declined, and 108 shares unchanged.

Here are the key factors behind market fall:

1) Tariff worries: US President Donald Trump Trump is expected to implement retaliatory tariffs on April 2 but the US administration has indicated that not all tariffs will be levied. However, investors are cautious ahead of the tariff announcement.

"The market will remain subdued in the next couple of sessions due to uncertainties surrounding the U.S. tariffs, which will influence the immediate trajectory and keep investors cautious," said Sameet Chavan, head of research at Angel One.

Meanwhile, Indian auto shares lost 0.8% on the day, taking their two-day decline to 2%.

Pharma stocks fell 0.9%, also weighed down by tariff worries. The US accounts for about one-third of India's total pharmaceutical exports.

Information technology companies, which earn a major share of their revenue from the US, lost 1.3% ahead of a key US inflation reading due after Indian market hours.

2) Negative global cues: Fall in Asian stocks has also been weighing on investor sentiment on Dalal Street on March 28 with heavy selling in South Korea and Japan as the latest tariff salvo from Trump stoked investor worries of an all-out trade war.

Trump moved ahead with a 25% tariff on auto imports due to kick in next week, drawing fierce criticism from politicians and industry executives across the globe and a warning from global car makers that price hikes were likely on the way.

The widening of the global trade war that Trump kicked off upon regaining the White House has jolted markets, with shares of global automakers hit particularly hard.

In Asia, Japan's Nikkei fell nearly 2%, led by sharp drops in Toyota and Honda, while South Korea's benchmark index shed 2%. The auto industry is a pillar of both countries' economies.

European stock futures pointed lower, with automaker-heavy Germany's DAX futures down 0.2%. U.S. futures were little changed.

Some automakers, including Volvo Cars, Volkswagen's Audi, Mercedes-Benz and Hyundai, have already said they will relocate portions of their production. Ferrari, which makes all of its cars in Italy, said it would raise prices by up to 10% on some models.

Hong Kong's Hang Seng index fell 0.6% as traders awaited clarity on Trump's tariff plans for China. Trump said he would be willing to reduce tariffs on China to get a deal done with TikTok's Chinese parent ByteDance to sell the popular app.

3) Rising gold prices: Gold hit a record high on Friday as fresh tariff plans from Trump fuelled fears the global trade war will intensify further, prompting investors to seek refuge in the safe-haven precious metal. Equities and gold usually have an inverse relationship.

Spot gold climbed 0.7% to $3,077.56 an ounce as of 0545 GMT, after hitting an all-time high of $3,079.01 earlier in the session. Bullion is up 1.8% this week, on track for a fourth straight weekly gain.

US gold futures gained 0.8% to $3,086.80.

Technical expert speak:

"We are of the view that 23,400/77,100 would be the key support zone for day traders. As long as it is trading above this level, the bullish formation is likely to continue. On the higher side, 23,750/78,000 and 23,800/78,200 would act as key resistance areas for traders. Conversely, a dismissal of 23,400/77100 could change the sentiment. Below this level, the market could slip to 23,300-23,225/76,800-76,500," said Shrikant Chouhan, Head Equity Research, Kotak Securities.

With inputs from Reuters