Stock market bloodbath: Sensex, Nifty tank over 1.5% amid US tariff fears

The benchmark indices, Sensex and Nifty50, ended lower by over 1 percent each in the first trading session of the financial year 2025-26 (FY26)

Stock Market Crash: Indian equity markets witnessed a massive sell-off on Tuesday amid heightened global volatility ahead of the anticipated US reciprocal tariff announcement on April 2. The benchmark indices, Sensex and Nifty50, ended lower by over 1.5 per cent each in the first trading session of the financial year 2025-26 (FY26). 

The Sensex settled at 76,024.51, down 1,390.41 points or 1.80 per cent, and the Nifty50 ended at 23,165.70, down 353.65 points or 1.5 per cent. From the broader basket, the Midcap and Smallcap indices settled down by about 0.86 per cent.

 

The sell-off was more pronounced across the sectoral front, as barring media and oil & gas, all other sectoral indices on the NSE settled in the red.

 

 

The IT sector was among the hardest hit due to its substantial exposure to the US market, and real estate stocks fell following Maharashtra's upward revision of ready reckoner rates, which affect property valuations. The Nifty Realty and IT indices settled lower by 3.1 per cent and 2.45 per cent, respectively.

 

Investors, according to Prashanth Tapse, senior VP (Research) at Mehta Equities, slashed their equity bets ahead of the start of Trump's reciprocal tariff imposition on imported goods from Wednesday. This decision is expected to affect the advantage India had over the US for many years. "In fact, domestic markets underperformed other global indices as investors fear the tariff decision could hurt sentiment and trigger further downfall,” he said.

 

Meanwhile, Vinod Nair, Head of Research at Geojit Investments, believes that investors are eagerly awaiting the specifics of these tariffs while also keeping a close eye on ongoing negotiations for a potential Indo-US trade agreement. Rising oil prices, he said, has further dampened market sentiment.

 

"Despite the short-term volatility related to tariffs, positive domestic factors such as an expected recovery in earnings growth, potential interest rate cuts by the RBI, and moderation in valuations are likely to provide stability and support for investors," said Nair.

 

Nifty50 finds support at 23,100

The Nifty50 index has experienced a sharp decline, approaching the 50EMA on the daily chart. This drop, according to Rupak De, senior technical analyst at LKP Securities, follows a recent phase of consolidation, signaling a weakening sentiment.  "However, in the near term, the 50EMA support could play a crucial role in stabilising the market. If this level holds, we may see a recovery," De said. That said, a decisive breakdown below 23,115, De believes, could trigger a deeper correction. "On the upside, resistance is observed at 23,250—a breakout above this level could reignite bullish momentum in the market."  The Nifty50 index, which had been consolidating, has slipped below its range and breached the moving average ribbon support at 23,400," said Ajit Mishra, SVP, Research, Religare Broking.  "The next crucial support lies around 23,100 (20 DEMA), and a breakdown below this level could further dampen sentiment, whereas holding above it may pave the way for a recovery," Mishra added.