Sensex plunges 1,400 pts, Nifty slips below 23,200 as IT, bank stocks tumble ahead of April 2 tariff deadline

HCL Tech, Bajaj Finserv, Bharat Electronics, HDFC Bank, and Shriram Finance were the major laggards.

Benchmark indices Nifty and Sensex extended their slide on April 1, with investors on edge ahead of former U.S. President Donald Trump’s tariff deadline. Nifty IT and Pharma—most exposed to potential trade shocks—led the sell-off, followed by financial stocks. Meanwhile, fear gripped the Street as India VIX, a key gauge of market volatility, surged 8 percent to inch near 14 levels.

At close, the Sensex was down 1,390.41 points or 1.80 percent at 76,024.51, and the Nifty was down 353.65 points or 1.50 percent at 23,165.70. About 2668 shares advanced, 1217 shares declined, and 140 shares unchanged.

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Market experts suggest that Trump tariffs could help exacerbate inflationary pressure, limiting the US Federal Reserve's ability to moderate interest rates. His latest move—a 25 percent tariff on foreign cars and auto parts—has investors bracing for broader trade restrictions. Gold, the ultimate safe-haven asset, surged past $3,125 per ounce, scaling fresh all-time highs at $3,161 as risk aversion took hold.

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Back home, the carnage was widespread. The Nifty IT and Pharma indices—both heavily reliant on U.S. markets—tanked 2.5 and 1.8 percent, respectively. Banking stocks weren’t spared either, with HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and SBI dragging Nifty Bank down over 1 percent. FMCG, Metals, and Infra shed about a percent each, while Nifty Auto dipped 0.5 percent as automakers posted their March sales numbers.

The broader market followed suit, with the Nifty Midcap 100 and Smallcap 100 slipping 0.8 and 0.5 percent, respectively. While these indices have crashed 10-14 percent this year, analysts warn that valuations remain a concern, and more pain could be on the horizon.

Telecom major Vodafone Idea shares jumped 20 percent in trade on April 1 after the firm announced the Central government will convert its outstanding spectrum dues into equity shares. Further, shares of Indus Towers also jumped seven percent. VI will issue 3,695 crore equity shares at a price of Rs 10 per share, converting dues to stock worth Rs 36,950 crore. However, the last closing price of Vodafone Idea shares on the bourses was Rs 6.8 apiece.

Read more: 'India to drop tariffs substantially': US President Trump's big claim ahead of April 2 deadline

HAL shares, up as much as 6 percent during trade, ended just a percent higher after receiving contracts worth Rs 62,700 crore from Defence Ministry. The defence major signed two contracts with the company for the supply of 156 light combat helicopters (LCH), Prachand, along with training and other associated equipment worth Rs 62,700 crore. The first contract is for the supply of 66 LCHs to the Indian Air Force (IAF) and the second is for the supply of 90 LCHs to the Indian Army.

Shares of real estate firms, including Oberoi Realty, Macrotech Developers and Prestige Estates, fell up to 5 percent on Tuesday as broader equity markets remained under selling pressure on the first trading session of the new financial year. The Nifty Realty index emerged as the worst-performing sectoral gauge, slipping over 3 percent, with all its 10 constituents trading in the red.

"On the flip side, the range between 23,700 and 23,800 remains a formidable barrier for the index, and a decisive breakthrough above this resistance level could trigger a bullish sentiment, enabling the price to reclaim the pivotal 24,000 level. Should this occur, there is the potential for further gains, elevating the index toward the 200-DSMA, which is currently situated around the 24,080 zone," Sameet Chavan of Angel One said.

"As we look toward the future, the sentiment for domestic markets appears to be optimistic. However, it is essential to pay close attention to the unfolding events on the global stage, especially considering the extended weekend and the ongoing uncertainties surrounding tariffs. These factors could significantly influence market dynamics in the coming days," he added.

IndusInd Bank, Trent, Bajaj Auto, Jio Financial Services, and HDFC Life Insurance Company were the top gainers on the Nifty. HCL Tech, Bajaj Finserv, Bharat Electronics, HDFC Bank, and Shriram Finance were the major laggards.