Stock markets slide resumes as Trump's reciprocal tariffs take effect

Nifty, Sensex decline over 0.5% as IT, pharma stocks bleed

Domestic indices slipped on Wednesday, mirroring a global equity sell-off triggered by the implementation of reciprocal tariffs by US President Donald Trump. This has reignited concerns of a looming global recession.

 

The Nifty 50 benchmark dipped 0.6 per cent, shedding 137 points to close at 22,399, while the Sensex fell 0.51 per cent, or 380 points, settling at 73,847.

 

Market volatility spiked, with the India Vix climbing 5 per cent to 21.43.

 

US stocks rose early Wednesday after administration officials discounted recession calls on Wall Street, following the implementation of new US tariffs and China retaliation.

 

But volatility returned towards mid-day in New York and major indexes turned lower, with the Dow leading the way down, off almost 1 per cent.

 

Crude inventories rose by 2.6 million barrels to 442.3 million barrels in the week ended April 4, the Energy Information Administration (EIA) said. This compares with analysts' expectations in a Reuters poll for a 1.4 million-barrel rise.

 

Other markets saw steeper declines, with Japan’s Nikkei plunging 4 per cent and European indices opening 3 per cent lower. In India, losses were moderated by the Reserve Bank of India’s (RBI’s) decision to cut interest rates for the second consecutive time. The apex bank has shifted its policy stance to “accommodative” from “neutral.”

 

Gains in India’s fast-moving consumer goods (FMCG) stocks also softened the blow, with the Nifty FMCG index rising 1.8 per cent. They were driven by strong performances from Nestle India and Hindustan Unilever, both up nearly 3 per cent. However, export-oriented sectors faced heavy selling pressure.

 

The Nifty IT index dropped 2.2 per cent, Nifty Pharma slid 1.9 per cent and Nifty Metal declined 1.6 per cent.

 

Apart from FMCG, the Nifty Consumer Durables index was among the few to end in positive territory.

 

“The IT sector continues to underperform ahead of the anticipated weak Q4 results. Pharma is wary of the challenges from US tariffs, while domestic-focused sectors like FMCG are holding up well, insulated from global slowdown risks,” said Vinod Nair, head of research at Geojit Investments. 

 

Market breadth remained negative, with 1,529 stocks advancing and 2,359 closing lower.

 

Major Sensex laggards included State Bank of India, Tech Mahindra, Larsen & Toubro, Tata Steel, Sun Pharma, Infosys, HCL Tech, Axis Bank, Tata Consultancy Services, and NTPC.

 

Meanwhile, Nestle, Hindustan Unilever, Titan, Power Grid, UltraTech Cement, and ITC posted gains.

 

Broader indices also weakened, with the Nifty Midcap 100 and Nifty Smallcap 100 falling 0.51 per cent and 0.86 per cent, respectively.

 

“Despite the RBI announcing a widely-anticipated 25 basis points (bps) repo rate cut and shifting its stance to accommodative, the markets remained under pressure. Investors are more focused on the escalating global trade tensions and the looming risk of a recession, which are expected to significantly disrupt global trade flows. On the sectoral front, FMCG emerged as the top performer, as investors moved towards defensives amid broader market uncertainty,” said Satish Chandra Aluri, analyst at Lemonn Markets Desk.

 

He added, “In addition to global trade developments, the upcoming fourth quarter earnings season will be a key driver in determining market direction over the next few weeks.”

 

Technical analysts said on the downside, 22,300 is expected to act as an immediate support zone for the Nifty while 22,500 will likely serve as near-term resistance.