Sensex Today: Sensex, Nifty dive 5% on US tariff, trade war fears

Indian stock markets tumbled sharply on Monday, with both indices dropping 5% amid rising global trade tensions. The BSE Sensex sank 5.19% (3,914 points), opening at 71,449.94, while the Nifty fell 5% (1,146.05 points) to 21,758.4. The steep decline mirrored losses across Asian markets, driven by fears of an intensifying trade war following fresh US tariffs.

The trigger for this market turmoil was last week’s announcement by US President Donald Trump, imposing reciprocal tariffs on multiple trading partners, including India. These measures introduced a 10% minimum tariff on all imports entering the US from April 5, while India’s exports to the US now face an increased tariff of 26%. In retaliation, China announced matching tariffs, raising rates to 34%, further fueling global trade tensions.’

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Experts Warn of Global Repercussions as Trade War Hits Sensex and Erodes Investor Confidence

Experts believe these developments have shaken investor confidence worldwide. “Investor confidence plummeted after US reciprocal tariffs triggered retaliatory measures from China. This escalating trade war has profoundly unsettled investors and intensified fears of an impending recession,” said Devarsh Vakil of HDFC Securities. He noted that weak US market trends and strong selling by foreign institutional investors have worsened the bearish sentiment in Indian markets.

Across Asia, markets reflected the same pessimism. The Hang Seng index tumbled 10.45%, Shanghai Composite fell 6.34%, Nikkei 225 dropped 6.6%, and South Korea’s KOSPI slumped 4.83%. “Markets globally are experiencing heightened volatility due to extreme uncertainty. Nobody knows how the situation created by Trump’s tariffs will evolve,” said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

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Broad-Based Sell-Off Hits Smallcap, Midcap, and Key Sectors Hard

The Indian domestic market saw widespread sell-offs across all segments. Nifty Smallcap 100 lost 5.42% while Nifty Midcap 100 dropped 4.34%. Sectoral indices were also hit hard — Nifty Metal declined by 6.98%, Nifty IT fell 5.93%, Nifty Oil & Gas slipped 5.1%, and Nifty Auto dropped 4.6%. Companies such as Tata Steel, Tata Motors, Hindalco, Infosys, and Tech Mahindra were among the top losers, with declines ranging from 6.7% to 10%.

Vijayakumar advised investors to adopt a cautious approach during this period of uncertainty. He highlighted that the current US tariff strategy is unlikely to last long. Additionally, India may be less vulnerable compared to other nations since its exports to the US account for only about 2% of its GDP. Furthermore, ongoing negotiations for a bilateral trade agreement between India and the US may help reduce tariffs and ease the situation in the near future.