₹8.5 Lakh Crore Wiped Out as Sensex, Nifty Fall on U.S. Tariff Shock

Indian equity benchmarks witnessed a brutal sell-off on Friday, with investor wealth eroding by nearly Rs 8.5 lakh crore, as fears of a global recession took firm hold following a sweeping tariff announcement by U.S. President Donald Trump. The Sensex plunged by 773.35 points (1.01 percent) to 75,522.01, while the Nifty 50 declined by 282.15 points (1.21 percent) to close at 22,967.95. The rout extended across mid- and small-cap segments, deepening the overall market collapse.

The downturn in Indian equities mirrored a global equity bloodbath, fueled by escalating trade tensions and recession fears. At midday, market breadth was significantly negative with 2,496 shares declining, 834 advancing, and 116 remaining unchanged on the BSE. Losses were particularly steep in IT, pharmaceutical, and metals sectors, dragging both the Nifty Midcap 100 and Smallcap 100 down by over 3 percent intraday, effectively wiping out the gains recorded in the prior two sessions.

Trump Tariff Bombshell Triggers Global Recession Fears

Investor sentiment turned sharply bearish following Trump’s announcement of a 26 percent reciprocal tariff on Indian exports—half of what he claimed India levies on U.S. imports. Labeling India a “very, very tough” trade partner, Trump justified the duties by alleging long-standing imbalances in global trade practices. The White House has reportedly expanded this tariff structure to cover over 60 countries, including China and members of the European Union.

The move has drawn immediate condemnation from affected nations, with both Canada and China signaling countermeasures. Canada imposed a 25 percent tariff on U.S.-manufactured automobiles, while China warned of “firm and necessary” retaliation unless the duties are withdrawn. This unfolding tariff war is stoking fears of an impending global recession.

“Wall Street benchmarks slumped on Thursday, logging one of the steepest single-day percentage declines in years. President Trump’s aggressive tariff push has raised the spectre of a full-blown trade war and possible global recession,” said Devarsh Vakil, Head of Prime Research at HDFC Securities.

Key Points:

• Trump announced 26% reciprocal tariff on Indian goods

• Broader action covers over 60 countries; EU and China may retaliate

• Canada already imposed 25% duty on U.S. cars; China to announce counter-steps

• Global economic slowdown risk now at its highest in years

Pharma, IT, Metals Lead Sell-Off; Broad-Based Collapse Across Sectors

All major sectors ended the session deep in the red, with IT, pharmaceuticals, and metals bearing the brunt of the selling. The Nifty IT index fell over 3 percent, with all 10 constituents closing lower. Coforge and Persistent Systems were among the steepest decliners, reflecting global concerns about demand in tech services and falling U.S. client sentiment.

The metals index also witnessed severe damage. Hindalco, Nalco, Vedanta, and JSW Steel fell up to 5 percent, on mounting fears that industrial commodity demand could sharply contract as global trade activity slows. With infrastructure spending and manufacturing orders at risk of stagnating, metal counters saw intense selling pressure throughout the day.

Pharmaceutical stocks also plummeted after Trump hinted at imposing separate tariffs on drug imports. “We are looking at pharma as a separate category — we will be announcing that sometime in the near future, not in the distant future,” Trump said in a briefing. The vague but ominous comment raised concerns over the future of India’s $50-billion pharma export industry.

Highlights:

• Nifty IT index dropped 3%; Persistent, Coforge led the decline

• Metal shares fell on fears of reduced industrial demand

• Trump’s remarks on pharma tariffs weighed heavily on drugmakers

• Cipla, Sun Pharma, and Divi’s Labs posted sharp losses

Mid- and Small-Cap Stocks Crushed as Broader Market Cracks

The sell-off wasn’t restricted to large-cap blue chips. Broader markets collapsed under pressure, with the Nifty Midcap 100 falling over 3 percent and the Nifty Smallcap 100 down a staggering 3.58 percent intraday. This marks one of the most severe declines in the broader market in recent months, completely reversing gains seen earlier in the week.

Stocks like Bharat Forge and Laurus Labs were among the major losers in the midcap basket. Bharat Forge, with its high exposure to U.S. Class 8 truck exports, fell further after recent Class 8 order data showed a continuing decline. Laurus Labs, which had already been under pressure from FDA inspection issues, sank further amid pharma-sector worries.

The two-day rally earlier this week had given some hope of a potential bottoming out, but the magnitude of the current global concerns has outweighed technical factors. Analysts are advising increased caution, with many predicting a broader valuation reset if global trade conditions deteriorate further.

Highlights:

• Nifty Midcap 100 and Smallcap 100 fell over 3% each

• Broader markets wiped out gains from previous two sessions

• Bharat Forge, Laurus Labs among top midcap losers

• Sentiment in mid- and small-cap space turning increasingly risk-off

Gensol Engineering Crashes Further; Hits Lower Circuit for Second Straight Day

Gensol Engineering continued its freefall, hitting the lower circuit limit for the second consecutive session and extending its monthly decline to over 62 percent. The stock has come under heavy pressure amid concerns over valuation, stretched balance sheets, and weak revenue visibility.

Market insiders indicate that the recent tariff-related uncertainty is only compounding the woes of companies like Gensol, which depend heavily on capex-sensitive sectors and project finance. Investors have been dumping the stock in large quantities amid a sharp erosion in confidence.

Highlights:

• Gensol Engineering hit lower circuit; down 62% in one month

• Investors concerned over valuations, weak order pipeline

• Broader tariff-led uncertainty adding to pressure

Technical Picture: Key Levels Breached, Support Looks Fragile

Technical analysts are warning of further downside if key support levels fail to hold. According to Shrikant Chouhan, Head of Equity Research at Kotak Securities, Nifty has already breached the 23,000 level and could fall toward 22,750 if weakness continues.

“After a gap-down opening, the indices showed no meaningful rebound. A breach below 75,300 on the Sensex or 22,800 on the Nifty would indicate continued bearish sentiment,” Chouhan said. He emphasized the lack of strong buying support and advised caution in leveraged positions.

Key Points:

• Nifty’s break below 23,000 signals deeper weakness

• Immediate support seen at 22,800; breach could trigger further selling

• Lack of buying interest suggests traders are in wait-and-watch mode

Global Ripple Effects: Asia Joins in the Panic

Equity sell-offs were not confined to Indian shores. Asian markets also took a beating, with Tokyo’s Nikkei falling over 3 percent and South Korea’s KOSPI losing nearly 2 percent. Shanghai and Hong Kong markets remained shut for the Qingming festival, offering temporary respite.

Overnight, the U.S. markets saw their worst single-day performance since 2020. The S&P 500 fell 4.9 percent while the Nasdaq 100 crashed 5.5 percent. With nearly $2.5 trillion in U.S. market cap erased in one session, global sentiment is expected to remain fragile heading into the next week.

Highlights:

• Nikkei down 3%, KOSPI down 2% amid global panic

• $2.5 trillion wiped out from U.S. markets on Thursday

• Volatility expected to persist in the near-term globally