Stock market trading guide, Apr 7: Nikkei hits lower limit, US tariff woes

Stock Market Today, April 7, 2025: Weak global cues, driven by US tariffs on over 180 countries and China's retaliatory 34 per cent tariffs on US imports, along with continued foreign institutional investor (FII) selling and the start of the RBI's Monetary Policy Committee (MPC) meeting today, are likely to influence the mood of key benchmarks, Sensex and Nifty50.

 

As of 6:36 AM, GIFT Nifty futures were down 1,006 points, at 21,952, compared to the previous close of Nifty futures at 22,958.15, signaling a gap-down start for Indian markets.

 

In the previous session, the Sensex fell 930.67 points, or 1.22 per cent, to close at 75,364.69, while the Nifty50 dropped 345.65 points, or 1.49 per cent, to 22,904.45.

 

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Also Read: US President Trump tariffs push markets down rabbit hole of uncertainty

 

Considering these factors, here are the top 4 cues for trading on Monday:

 

Global cues 

 

Asia-Pacific markets continued their downward trend on Monday, as concerns over a potential global trade war sparked by US President Donald Trump's tariffs led to a risk-averse sentiment.

 

Japan’s Nikkei saw a sharp drop of over 8 per cent, while the broader Topix index fell 8.6 per cent. Trading in Japanese futures was halted earlier due to the market triggering circuit breakers.

 

South Korea’s markets also faced major declines, with the Kospi index falling 4.3 per cent at the open, while the Kosdaq lost 3.4 per cent. Australia’s ASX 200 dropped 6 per cent, entering correction territory with an 11 per cent fall since its peak in February.

 

In the US, futures also saw a decline as investors lost confidence in the Trump administration’s ability to negotiate favourable trade deals. Dow Jones futures dropped 979 points, or 2.5 per cent Sunday evening, pointing to another tough session ahead on Monday. S&P 500 futures slipped 2.9 per cent. while Nasdaq-100 futures tanked 3.9 per cent. 

US oil prices also fell below $60 a barrel, with WTI crude futures dropping more than 3 per cent to $59.74, marking their lowest level since April 2021.

 

Despite these losses, Trump’s economic officials downplayed concerns about inflation or a recession, asserting that tariffs would remain in place regardless of market reactions.

 

On Friday, US stock markets saw a sharp sell-off after China announced additional 34 per cent tariffs on US goods, escalating fears of a global trade war that could push the world’s largest economy into recession. 

 

The Dow Jones plummeted 5.5 per cent – the largest drop since June 2020 during the Covid-19 pandemic. The S&P 500 fell 5.97 per cent, marking its steepest decline since March 2020. Additionally, the Nasdaq, which includes many tech companies with major ties to China, lost 5.8 per cent. This also represents a 22 per cent decline from its peak in December, officially putting the index in a bear market.

 

RBI MPC meeting

 

The six-member Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will commence on Monday for its first meeting of the current financial year. Expectations are high for another 25 basis points (bps) cut in the policy repo rate, although there is also a slim possibility of a deeper rate reduction. The decision will likely be announced on Wednesday, April 9, 2025.

 

Additionally, attention will be on measures related to liquidity aimed at improving the transmission of policy rates to both bank lending and deposit rates.

 

Ahead of the meeting, the central bank held several discussions with bankers to gather feedback on the liquidity framework. READ MORE

 

Also Read: US reciprocal tariffs: India's FY26 economic growth seen closer to 6.3%

 

Notably, the new Consumer Price Index (CPI) series will include housing inflation in rural areas, reflecting changing consumption patterns and growing rental markets outside urban centre. Currently, housing inflation is only measured in urban areas due to the limited number of rented homes in rural regions. The CPI data is likely to be released on April 11.

 

On the institutional activity front, FIIs and DIIs both were net sellers on Friday, April 4, 2025. FIIs sold shares worth ₹3,483.98 crore, while DIIs offloaded equities of ₹1,720.32 crore.

 

Also Read: FY26: A market-share grab year for broking, says Centrum Broking's ED & CEO

 

In the IPO market, Retaggio Industries IPO (SME) will list on the bourses.

 

Technicals 

 

The short-term outlook suggests that if the market reclaims the 23,000/75800 mark, we could see a pullback rally up to 23,250-23,325/76500-76800. On the flip side, fresh selling is possible only after a break below 22,800/75200. If that happens, it could slip to 22,700/74900. Further downside may continue, potentially dragging the index down to 22,500/74400, said Amol Athawale, VP of technical research at Kotak Securities.

 

Dhupesh Dhameja, derivatives research analyst at SAMCO Securities, on the other hand, noted that the Call writing-heavy 23,000–23,200 region has flipped from a support area into a major resistance ceiling. Meanwhile, the 22,800–22,500 zone has now become crucial near-term support, backed by fresh Put additions. A clean break below 22,800 could accelerate the bearish momentum and invite further unwinding. Until the index decisively reclaims 23,000, rallies are likely to be sold into.

 

Stocks to watch 

  FSN E-Commerce Ventures (Nykaa): Nykaa witnessed a continued growth momentum in Q4FY25 with consolidated net revenue growth expected to be in the low to mid twenties Y-o-Y, the company said, in a statement.

 

IndusInd Bank: Q4 provisional update showed net advances grew 1.4 per cent year-on-year Y-o-Y) to ₹3.47 trillion, from ₹3.43 trillion a year ago. Deposits zoomed 6.8 per cent annually to ₹4.11 trillion.

 

Bajaj Housing Finance: In Q4, gross disbursement increased 25.1 per cent Y-o-Y to ₹14,250 crore compared to ₹11,393 crore last year.