Indian equity benchmarks experienced a severe downturn on Monday as the BSE Sensex and Nifty50 both fell by over 4% in early trading. At 9:52 AM, the BSE Sensex had dropped by 2,658 points (3.53%) to 72,707.11, while the Nifty50 declined by 863 points (3.77%) to 22,041.95.
Among the biggest decliners on the BSE Sensex were Tata Steel (–10%), Tata Motors (–7.86%), Infosys (–6.98%), Tech Mahindra (–6.36%), and L&T (–6.45%), with all thirteen market sectors registering losses. Technology companies, particularly those heavily reliant on U.S. revenue, were down by 7%, and smaller as well as mid-cap stocks dropped by 6.2% and 4.6% respectively. Overall, the market’s total capitalization shrank by Rs 19.4 lakh crore, reducing the aggregate value to Rs 383.95 lakh crore.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted the global markets are gripped by extreme uncertainty amid the fallout from the Trump-imposed tariffs. He commented, “No one has a clue about how this turbulence caused by Trump tariffs will evolve. Wait and watch would be the best strategy in this turbulent phase of the market.” Vijayakumar also outlined key points for investors: the current tariffs may be short-lived; India is less exposed to U.S. market fluctuations since its exports to the United States account for only about 2% of its GDP; and ongoing negotiations for a Bilateral Trade Agreement with the U.S. could lead to lower tariffs for India. He added that sectors driven by domestic demand—such as financial services, aviation, hospitality, select automotive, cement, defence, and digital platforms—are likely to remain relatively insulated, and that Trump is unlikely to target pharmaceuticals next.
The coming week is set to be eventful with both domestic and international developments. Domestically, the MPC meeting scheduled for April 9, along with key economic indicators like IIP and CPI data on April 11, will be critical. Additionally, the quarterly earnings season kicks off with TCS releasing its results on April 10.
Why is stock market falling today?
- U.S. Market Bearishness:
The Nasdaq index entered bear market territory on Friday, falling more than 20% from its recent peak. This drop followed President Donald Trump’s sweeping tariff announcement, which surprised investors and raised alarms about global economic slowdown. Federal Reserve Chair Jerome Powell remarked that the tariffs surpassed expectations and warned of potential inflationary pressures and subdued economic growth. - Global Market Downturn:
Internationally, Asian markets mirrored the decline seen in India. Japan’s Nikkei fell by 7%, South Korea’s Kospi by 5%, China’s blue-chip index by nearly 7%, and Hong Kong’s Hang Seng plunged over 10.5%. U.S. futures also weakened, with Nasdaq futures down 4% and S&P 500 futures dipping 3.1%, while European markets recorded similar negative trends. - Recession Concerns in the U.S.:
Investor anxiety is shifting toward fears of a recession. Although the U.S. consumer price index for March is expected to show a modest 0.3% increase, experts predict that the new tariffs will drive up costs across industries, from food to automobiles. With roughly 87% of U.S. companies set to announce earnings between April 11 and May 9—led by the financial sector—there is heightened concern over narrowing profit margins due to rising operational costs. - Falling Global Commodity Prices:
Commodity markets have taken a hit amid fears of weakening demand and economic slowdown. Brent crude prices dropped by 6.5%, WTI by 7.4%, gold by 2.4%, and silver by 7.3%. Industrial metals also fell sharply, with copper down 6.5%, zinc by 2%, and aluminium by 3.2%. - Flight to Safety:
Amid mounting fears of a global downturn, investors have increasingly turned to safe-haven assets. Strong buying of government securities pushed the 10-year U.S. Treasury yield down by 8 basis points to 3.916%. Additionally, rising activity in Fed funds futures suggests market expectations of an extra 25-basis-point rate cut by the Federal Reserve within the year. This shift towards secure investments has led to widespread selling in equity markets, even as Powell maintained that the Fed would remain cautious about policy adjustments.