Sensex falls nearly 800 pts from day's high, Nifty below 22,400: Trade war fears among key factors behind market decline

Sensex falls 700 pts from day's high, Nifty below 22,400: Trade war fears among key factors behind market decline

Benchmark equity indices gave up early gains on Wednesday, with the Sensex tumbling over 750 points from its intraday high and the Nifty slipping below the 22,400 mark, as investor sentiment remained fragile amid global trade tariff uncertainties.

The BSE Sensex fell 793.99 points from the day's high to hit a low of 73,598.16, while the NSE Nifty dropped 247.85 points to a low of 22,329.55, weighed down by selling pressure in IT stocks. Infosys, Wipro, and HCL Technologies were among the biggest laggards in the Nifty 50 pack.

Key Factors Behind Market Decline

1) Trade War Fears Weigh on Sentiment: Global markets remain jittery over escalating trade tariff concerns. The uncertainty worsened after US President Donald Trump indicated a sharp increase in tariffs on steel and aluminium imports from Canada, initially proposing to double the levy to 50 percent before hinting at a reconsideration. Analysts warn that reciprocal tariffs set to take effect in April could further dampen market sentiment.

"Markets across the globe are facing uncertainty due to the lack of clarity on trade policies. The situation may deteriorate further if reciprocal tariffs come into play. A sustained recovery in equities appears unlikely in such a scenario," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

2) India, US CPI Data Awaited: Traders exercised caution ahead of key macroeconomic data releases in India and the US. Meanwhile, Foreign institutional investors (FIIs) have already offloaded stocks worth Rs 4,17,216 crore on a net basis this fiscal, adding to selling pressure, according to Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.

According to Bloomberg estimates, the US Consumer Price Index (CPI) is expected to rise by 0.3 percent in February, following a 0.5 percent increase in January, with the core measure also anticipated to see a 0.3 percent uptick.

Stock Market LIVE Updates

3) US Recession Concerns Loom: President Trump did not rule out the possibility of a US recession in 2025. In a recent interview to Fox News, he said, "There is a period of transition, because what we are doing is very big – we are bringing wealth back to America. It takes a little time." Market participants remain wary of the potential economic impact of policy shifts under his administration.

Technical View

Anand James, Chief Market Strategist at Geojit Financial Services, noted that technical indicators signal a period of volatility. "The rejection trades from the 20-day simple moving average (SMA) and the evening star candlestick pattern had already pointed to a reversal, leading to a gap-down opening yesterday. The 22,350-22,300 zone provided some buying support, triggering a rebound. However, the inability to cross 22,520 keeps the trend evenly poised. Until the index sustains above this level for a few hours, chasing upsides could be risky,” he said.

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