Key Points:
- Market Crash: BSE Sensex nosedived by over 1,100 points to 76,284.69, and Nifty-50 dropped 266 points to 23,255 due to fears of Trump’s reciprocal tariffs.
- IT Sector Hit Hard: Stocks of Infosys, TCS, HCL Tech, and other IT giants saw significant declines amid tariff concerns.
- Global Recession Fears: Goldman Sachs raised the probability of a U.S. recession to 35%, adding to market anxiety.
- Crude Oil Concerns: Brent crude prices rose by 1.51% to $74.74 per barrel, increasing import costs for India.
New Delhi: Indian stock markets faced a sharp sell-off on April 1, 2025, as fears surrounding U.S. President Donald Trump’s reciprocal tariffs rattled investor sentiment. The BSE Sensex plunged over 1,100 points to close at 76,284.69, while the NSE Nifty-50 fell by 266 points to settle at 23,255. The downturn was primarily driven by heavy selling in IT stocks and broader concerns about global economic instability.
Impact of Trump’s Reciprocal Tariffs
President Trump is set to announce new tariffs on April 2, dubbed “Liberation Day.” These reciprocal tariffs aim to match the tax rates other countries impose on U.S. goods. The policy is expected to impact multiple sectors globally, including pharmaceuticals, electronics, steel, and automobiles. For India, the IT sector heavily reliant on U.S. revenue has been hit hardest.
Stocks of major IT companies like Infosys (-2.8%), TCS (-2%), HCL Tech (-1.8%), and Mphasis (-3%) saw steep declines as investors braced for higher hiring costs and reduced outsourcing contracts due to tariff-related uncertainties.
Sectoral Performance
The market witnessed widespread declines across sectors:
- IT Sector: Nifty IT index fell by over 1.4%, with major players like Infosys and TCS leading the losses.
- Banking & Financial Services: Nifty Bank dropped by 1.38%, while Nifty Financial Services fell by 2%.
- Midcap & Smallcap Indices: Both Nifty Midcap Select and Smallcap indices declined by over 1%, reflecting broader market weakness.
Global Recession Concerns
Adding to the turmoil were fears of a potential U.S. recession. Goldman Sachs increased its recession probability from 20% to 35%, citing the disruptive impact of Trump’s tariff policy on global trade and investment sentiment. Economists warn that higher import taxes could elevate inflation and reduce consumer spending, further straining economic growth.
Crude Oil Price Surge
The rise in Brent crude prices to $74.74 per barrel has exacerbated concerns for India a major oil importer as higher import costs could worsen the trade deficit and pressure the rupee.
Expert Insights
Market analysts suggest that stability in Nifty above the critical range of 23,700–23,750 is essential for recovery. However, if the index falls below 23,300, further weakness may ensue with potential movements of up to 250 points. Investors are advised to remain cautious amid heightened global uncertainty.
The Indian stock market’s sharp decline underscores the far-reaching implications of Trump’s tariff policy on global trade dynamics. While sectors like IT and banking bore the brunt today, broader economic challenges including crude oil price hikes and recession fears continue to weigh heavily on investor sentiment. As markets await clarity on “Liberation Day” tariffs tomorrow, volatility is expected to persist in the near term.
