Sensex plunges 800 pts from day's high, Nifty below 23,700: Tariff overhang among key factors behind market jitters

Sensex down 800 pts from day's high, Nifty below 23,700: Tariff overhang among key factors behind market jittery

Benchmark indices Sensex and Nifty gave up early gains on Tuesday as investor sentiment turned cautious amid concerns over global trade tariffs and profit booking at higher levels.

The BSE Sensex, after opening on a strong note, slipped 829.51 points or 1.06 percent from the day’s high to touch an intraday low of 77,912.18 around noon. The NSE Nifty also declined 242.05 points to 23,627.55, weighed down by selling pressure in select heavyweight stocks.

Sensex gained 32.81 points or 0.04 percent to settle at 78,017.19. The NSE Nifty eked out gains of 10.30 points or 0.04 percent to 23,668.65.

Among the major laggards, IndusInd Bank, Dr. Reddy’s Laboratories, Hindalco, Coal India, and ICICI Bank fell up to 5 percent in intraday trade.

Key Factors Behind Market Weakness

1) Tariff Overhang: Investor sentiment took a hit following U.S. President Donald Trump’s statement on upcoming automobile tariffs. While he hinted that not all tariffs would be implemented by April 2, he reinforced his stance on imposing 25 percent secondary tariffs on any country purchasing oil or gas from Venezuela.

A White House official, quoted by Reuters, cautioned against expecting a reprieve, stating that the President remains firm on implementing reciprocal tariffs. Market participants are now awaiting further clarity on trade policies before taking fresh positions.

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that while market momentum favours bulls, there is no strong fundamental support for a sustained rally due to the uncertainty over trade tariffs.

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2) Profit Booking: Markets witnessed profit booking after an initial rally, as traders locked in gains amid concerns over geopolitical tensions and potential trade disruptions. Analysts noted that the near-term market trend will depend on domestic consumption recovery and corporate earnings performance.

Sectorally, 11 out of 13 indices were trading in the red, with only Nifty Private Bank and IT stocks managing to hold their ground.

"The short-term market structure remains positive, but overbought conditions are leading to profit booking at higher levels. For traders, key resistance levels are at 23,700-23,800 for Nifty and 78,300-78,500 for Sensex, while support is placed at 23,500-23,400 and 77,500-77,200, respectively. A break below 23,300 or 76,900 may trigger further downside," said Shrikant Chouhan, Head of Equity Research at Kotak Securities.

Nifty pauses after a six-day rally to slip below 23,700, Sensex off day's high on profit booking

3) Weak Global Cues: Global markets also weighed on domestic equities, with Dow Jones Futures trading in negative territory. South Korea’s Kospi slipped 0.5 percent to 2,617.11, while Hong Kong’s Hang Seng index declined 2.2 percent to 23,387.86, dragged down by selling in technology stocks. The Shanghai Composite Index was down 0.2 percent at 3,364.05.

Technical Outlook

According to analysts, the Nifty’s swing high of 23,800 in February 2025 serves as an intermediate resistance, followed by the 24,100 level, which aligns with the 200-day simple moving average (DSMA).

“As we approach the monthly expiry, market momentum remains strong, offering opportunities for traders to capitalise on dips. Implementing a trailing stop loss strategy could help safeguard gains amid volatility,” said Sameet Chavan, Head of Research, Technical & Derivatives at Angel One.

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