Nifty down 1.5%, Sensex crashes 1,500 pts: Why stock markets fell today?

Nifty 50 fell as much as 1.43 per cent, while Sensex crashed 1,294 points during the session

Indian benchmark indices tumbled over 1.5 per cent on the first trading day of the new financial year as US President Donald Trump's reciprocal tariff deadline gripped the street. 

 

The key gauge Nifty 50 fell as much as 1.62 per cent, or 383.3 points, in the intraday trade to hit a low of 23,136, marking the worst intraday fall since February 28, while the 30-stock Sensex fell as much as 1.94 per cent, or 1,502 points, to rally below the 76,000 mark. 

 

As of 3:30 PM, the Nifty was down 1.50 per cent at 23,165.7, while the Sensex was down 1.81 per cent at 76,011. Meanwhile, the broader marker fell alongside the benchmarks after an initial gain. The Nifty Midcap 150 index and the Smallcap 250 index were down by 0.99 per cent and 0.49 per cent, respectively. 

 

 

The risk-off sentiment comes as Indian markets are reacting to the correction that took place in the global stocks on Monday on fears of Trump's tariff. US President Donald Trump is set to announce his reciprocal tariffs plan on Wednesday during an event in the White House Rose Garden, according to media reports. Amidst this, traders remain on edge given the mixed signals from Trump's messaging earlier.  ALSO READ | STOCK MARKET CRASH LIVE UPDATES TODAY

 

Globally, markets are focused on the details of Trump’s reciprocal tariffs. "The market trends after the announcements will depend on the details of the tariffs and how they will impact different countries and sectors," according to VK Vijayakumar, Chief Investment Strategist, Geojit Investment. 

 

Key reasons why Indian stock markets fell today:

 

Tariff Panic: Indian stocks, alongside their global peers, are trading under caution amid uncertainties relating to the implications of the reciprocal tariffs. Uncertainty relating to Trump's tariff is resulting in a lack of fresh buying interest, according to Ruchit Jain, Head of technical Research at Motilal Oswal. "As our markets were closed on Monday and global markets had corrected, we have seen that reaction in our markets today." The 20-daily exponential moving average (DEMA) support for Nifty is placed around 23,100, he said. 

 

Profit Booking: After a sharp recovery from the lows in early March, investors are resorting to profit booking ahead of the key macro event, according to analysts. The market took a breather in March, with a market cap recovery of about ₹25 trillion, according to G Chokkalingam of Equinomics Research. "So there could be some profit booking seen ahead of Trump's tariff deal tomorrow." After five months of continuous decline, the benchmark indices ended over 6 per cent higher in March, backed by a revival in foreign inflows. 

 

FII pessimism: After continuous selling, foreign portfolio investors tuned net buyers on a weekly basis in the last two weeks, triggering a recovery in the benchmarks. However, on Friday, global funds snapped a six-day buying streak to turn net sellers of ₹4,352 crore, according to data from NSE. Global funds are selling today out of fear, as the broader market is not very negative, Chokkalingam said. The advance-decline ratio is very high, and the large caps are under pressure in today's trade, he said. "So it shows that FIIs is selling is there."

 

Global cues: Stocks in Asia trimmed their initial gains and remained mixed while the future contracts on Wall Street traded lower, signalling volatility. Last checked, Japan's Nikkei was down 0.01 per cent while South Korea's Kospi was higher by 1.5 per cent. Overnight, Wall Street closed the session higher after an initial decline as fears gripped the street on the implications of the reciprocal tariffs set to take effect from April 2. The S&P 500 index and the Dow Jones Industrial Average rose by 0.55 per cent and 1 per cent, respectively, as of Monday. The Nasdaq 100 index fell by 0.14 per cent.