Sensex Falls 1,000 Points, Nifty Slips Below 23,300 Amid US Tariff Worries

Indian Markets Plunge Amid Global Trade Uncertainty

The Indian stock market witnessed a sharp sell-off on Tuesday as benchmark indices, the BSE Sensex and NSE Nifty, tumbled amid rising fears surrounding US President Donald Trump’s upcoming reciprocal tariff announcement. Market participants remained cautious ahead of April 2, when the new tariffs are expected to be unveiled.

The BSE Sensex plummeted 999.23 points or 1.29% to hit an intraday low of 76,415.69, while the NSE Nifty declined 243.25 points or 1.03% to settle at 23,276.10. The fall was led by IT stocks, financials, and auto stocks, with heavyweight companies like Infosys, TCS, Bajaj Finance, and Maruti Suzuki among the biggest losers.

Experts believe that uncertainty over global trade policies, a surge in crude oil prices, and recession risks in major economies like the US and the European Union have created a volatile market environment, prompting investors to adopt a cautious approach.

Market Drivers: Factors Weighing on Investor Sentiment

Trump’s Reciprocal Tariff Plans Create Market Jitters

A major reason behind Tuesday’s sharp fall in Indian equities was the looming “Liberation Day” tariffs that US President Donald Trump is set to announce on April 2. His administration has already imposed levies on key trade partners, including China, Canada, Mexico, and the European Union, and new tariffs are expected to target industries such as automobiles, steel, aluminum, copper, semiconductors, pharmaceuticals, and lumber.

“Global markets are on edge awaiting details of Trump’s reciprocal tariff policy. The impact on Indian industries, particularly IT and pharmaceuticals, remains uncertain, and this has triggered investor nervousness,” said V K Vijayakumar, Chief Investment Strategist at Geojit Investment Services.

Markets remain in wait-and-watch mode as investors brace for potential disruptions in global trade flows.

Crude Oil Prices Surge, Raising Inflation Concerns

Adding to market woes, Brent crude prices surged 1.51% to $74.74 per barrel, leading to concerns over India’s rising import bill and inflationary pressures. Since India imports nearly 85% of its crude oil, a sustained increase in global oil prices could negatively impact corporate profitability, consumer spending, and fiscal stability.

“India is highly sensitive to fluctuations in oil prices. If crude continues to rise, we could see further pressure on the rupee, higher input costs for manufacturing companies, and an eventual pass-through effect on consumers,” said Anuj Gupta, Vice President of IIFL Securities.

Rising crude prices could add to economic headwinds by pushing up inflation and hurting corporate earnings.

Recession Fears in the US and Europe Amplify Volatility

Adding to global uncertainty, Goldman Sachs revised its US recession probability from 20% to 35%, citing the potential economic impact of Trump’s new tariffs. The European economy is also facing headwinds, with analysts warning of a technical recession in the coming quarters.

A slowing US economy could have a direct impact on Indian IT and export-oriented sectors, which generate significant revenues from American clients. Moreover, any economic slowdown in Europe could affect India’s auto, pharmaceutical, and chemical exports.

“Investors are factoring in the risk of slower global growth, which could reduce demand for Indian exports. The IT sector is particularly vulnerable to a weaker global economy, and that’s why stocks like Infosys and TCS were among the top laggards today,” said Ravi Dharamshi, Founder of ValueQuest Investment Advisors.

Rising global recession fears could hit Indian exports and dampen corporate earnings growth.

Sectoral Performance: IT, Financials, and Autos Lead the Decline

IT Stocks Slide Amid Weak Global Cues

The NIFTY IT Index dropped over 2%, with major tech companies witnessing sharp declines. Infosys, TCS, and HCL Technologies saw deep cuts as concerns about a potential slowdown in IT spending due to global economic uncertainty weighed on sentiment.

“With recession risks rising in the US, IT companies could face slower deal closures and margin pressure. The market is pricing in these risks,” noted Gaurav Bissa, VP of Equity Research at InCred Equities.

IT stocks remain under pressure due to fears of weaker client demand in the US and Europe.

Financial and Banking Stocks Face Selling Pressure

Banking stocks also witnessed a sell-off, with HDFC Bank, Axis Bank, and Bajaj Finance losing over 2% intraday. The NIFTY Bank Index fell nearly 1.8%, reflecting concerns that a high-interest rate environment in global markets could slow credit growth.

Experts believe that tightening global liquidity, coupled with domestic inflation risks, could impact bank profitability and loan growth.

Banking stocks are struggling as global interest rates remain high and credit demand slows.

Auto Sector Sees Mixed Performance

Auto stocks remained volatile, with Maruti Suzuki, Tata Motors, and Mahindra & Mahindra witnessing intraday losses. The sector is particularly vulnerable to Trump’s potential auto tariffs, which could impact exports to the US and key European markets.

However, analysts believe domestic demand remains robust, and a potential cut in interest rates by the RBI later this year could support the sector.

Auto stocks remain under scrutiny as investors assess global trade risks and domestic demand trends.

Market Outlook

Traders and investors are closely monitoring key levels for the Nifty 50 and Sensex to gauge market direction. Analysts suggest that:

• Nifty must hold above 23,000-22,800 for stability. A breakdown could push the index toward 22,500.

• A decisive move above 23,750 could signal strength, with resistance seen near 24,200-24,500.

• For Bank Nifty, the 53,000-53,500 zone remains critical for an upward breakout.

“If the market manages to sustain above 23,700, we may see a recovery towards 24,200. However, breaking below 23,300 could extend selling pressure,” said Anand James, Chief Market Strategist at Geojit Investments.

Investors should watch technical levels for potential trend reversals or deeper corrections.

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