Sensex skids 2,226 pts in worst fall in 10 months; experts advise caution

The selloff in the markets, analysts said, was driven by rising global uncertainties, weak cues, and growing recession fears

Stock market crash, April 7, 2025: The tariff turmoil fueled by US President Donald Trump's announcements of reciprocal tariffs on nearly 180 countries continued to weigh on the equity markets, as benchmark domestic indices logged their worst fall since June 2024. 

 

The BSE Sensex tanked 2,226.79 points, or 2.95 per cent, to end at 73,137.90, while the NSE Nifty50 fell by 742.85 points, or 3.24 per cent, to end at 22,161.60. At its lowest point during the day, the indices had fallen by nearly 5 per cent each.

 

Notably, all the 30 constituent stocks of the Sensex settled in the red, with Tata Steel being the top laggard, ending down by 7.16 percent.

 

 

The sell-off in the Indian equity markets, analysts said, was driven by rising global uncertainties, weak cues, and growing recession fears, worsened by China's decision to impose a 34 per cent tax on all US imports in response to Trump's tariff hikes.

 

After US markets plunged on Friday, Prashanth Tapse, senior VP (Research), Mehta Equities, said it was clear for other global equity indices, which fell like a pack of cards amid fears that Trump's policies on reciprocal tariffs may lead to recession and higher inflation in the US going forward. 

 

The markets, Vinod Nair, head of research at Geojit Investments, said, tumbled as the carnage over high US tariffs and retaliation by other countries may kickstart a trade war.

 

From the broader basket, Midcap and Smallcap indices ended down by over 3 percent. All the sectoral indices on the NSE settled in the red, with Nifty Metal being the worst hit, ending down by 6.75 per cent, dragged by Lloyds Metals and National Aluminium Company. Among others, Nifty IT, Bank, Auto, Financial Services, and Realty ended with losses of up to 3.94 per cent.

 

"Sectors like IT and metals have underperformed relative to the broader market due to the risk of high inflation with slower growth that may result in a potential recession in the US," Nair said. 

 

Though the overall impact on India, Nair believes, may be limited when compared with other countries, investors are advised to play cautiously during this fray. Focus, he said, will be on pure-play domestic themes, where the rebound is likely to be fair when the dust settles.

 

Tapse, on the other hand, believes that with Dow Futures indicating a precarious start for US markets on Monday, equity benchmark indices worldwide could be in for a rough ride on Tuesday as well.

Nifty50 short-term trend remains weak, finds support at 21,900

The Nifty50, Rupak De, Senior Technical Analyst at LKP Securities, said, has fallen back into a descending channel on the daily timeframe as bearish sentiment rose amid escalating trade tensions between countries. The index slipped by more than 1,000 points at one point but recovered to close 418 points off the low.

 

"For the day, the index found support around the multiple support zones near 21,700. In the short term, the trend remains weak. On the higher side, resistance is placed at 22,350 and 22,550. On the lower side, support is seen at 21,900, below which the decline is likely to resume," De said.

 

However, according to Ajit Mishra – SVP, Research, Religare Broking, a decisive close below the 21,700 level on the Nifty50 could pave the way for further downside toward 21,300. "Conversely, any recovery attempt is likely to face resistance in the 22,500–22,800 zone."