Indian stock markets took a steep dive on Tuesday, reeling from the looming threat of US reciprocal tariffs set to take effect on April 2. The BSE Sensex, a key market benchmark, slumped 1.94% during the trading day, stripping away Rs 3.44 lakh crore in investor wealth. This marked the steepest single-day drop in a month, halting the recovery momentum that had been building throughout March. IT and banking stocks bore the brunt of the sell-off, driven by growing investor unease.
The Sensex wrapped up the session down 1.8%, shedding 1,390.41 points to close at 76,024.51, with 28 of its 30 components finishing in negative territory and just two posting gains. The NSE Nifty50 followed suit, declining 353.65 points or 1.50% to end at 23,165.70.
The market jitters stem from US President Donald Trump’s plan to introduce reciprocal tariffs on April 2, a move he has branded “Liberation Day” for the US economy.
Vinod Nair, Head of Research at Geojit Investments Ltd., linked the downturn to surging global volatility as the US tariff announcement approaches. “Investors are anxiously awaiting clarity on the tariff details and keeping tabs on negotiations that could shape a future Indo-US trade deal,” he said.
Ajit Mishra, SVP Research at Religare Broking Ltd., noted widespread pressure across major sectors, with realty, IT, and financials suffering the most significant losses. Still, broader market indices displayed some grit, with the BSE midcap index dipping 1.04% and the smallcap index inching up 0.07%. “Market participants are tracking the tariff discussions closely, assessing their potential ripple effects on specific sectors, which has triggered profit-taking after recent gains,” Mishra added.
Nair pointed out that the IT sector’s heavy reliance on the US market made it especially vulnerable, while rising oil prices further darkened the mood among investors.
Leading the Sensex’s losers were HCL Tech, Bajaj Finserv, HDFC Bank, Bajaj Finance, Infosys, Titan, ICICI Bank, Sun Pharma, Reliance Industries, Larsen & Toubro, Tech Mahindra, and NTPC.
Despite the immediate turbulence, Nair struck a hopeful note, citing domestic strengths that could steady the ship. “Factors like an anticipated rebound in earnings growth, possible RBI rate cuts, and more balanced valuations should offer investors support amid this uncertainty,” he said.