US tariffs spook markets: Sensex, Nifty 50 see sharpest fall in 10 months

Investors lose over Rs 14 trillion; US president threatens extra 50% levy on China

A global equity selloff intensified on Monday, driven by mounting fears of a trade war and a potential recession in the US. India’s benchmark indices, the Sensex and Nifty 50, suffered their sharpest single-day fall in 10 months.

  Roughly ₹14 trillion in market capitalisation was erased in the latest session of selloff. Also, the rupee wiped out all its gains versus the dollar this calendar year as it depreciated by 0.6 per cent — the most in a day since February 6, 2023. 

  The market rout was fuelled by growing concerns that US President Donald Trump would not soften his stance on reciprocal tariffs, following his remark that “sometimes you have to take medicine to fix something”. Later in the day, he hardened his position on China further, warning that the US would impose an additional 50 tariffs on Chinese imports from April 9, unless Beijing rolled back its retaliatory 34 per cent levy on US goods.

 

  “Negotiations with other countries, which have also requested meetings, will begin taking place immediately,” Trump posted on Truth Social. 

  In early trading, the Sensex and Nifty 50 each plunged by 5 per cent — the steepest intraday decline since the Covid crash of March 2020 — as market tickers flashed vivid red, echoing the turmoil of the pandemic period.

 

The Sensex ended the session down 2,227 points, or 2.95 per cent, at 73,138, while the Nifty 50 fell 743 points, or 3.2 per cent, to close at 22,162. Selling pressure was broad-based, with 775 stocks hitting their 52-week lows and 543 breaching lower trading limits. Market breadth was weak, with six stocks declining for every one that advanced.

 

 Foreign institutional investors (FIIs) led the exodus, offloading ₹9,040 crore worth of equities -- the highest single-day outflow since February 28. Domestic institutional investors (DIIs), in contrast, purchased shares worth ₹12,122 crore, marking their strongest buying since the same date.

 

Despite the steep fall, the Indian market fared relatively better than its global peers. The MSCI Emerging Markets index plunged as much as 8.4 per cent, its sharpest intraday move since the 2008 financial crisis. 

Overall, global equity markets have witnessed a decline of nearly $10 trillion in market value in the past three sessions.

 

Wall Street endured a turbulent trading session, swinging from an early plunge -- dragging major indices 20 per cent below their record highs -- to a brief rally, only to end lower as investor anxiety over the trade war’s economic impact persisted.

 

In Asia, Japan’s Nikkei 225 dropped 7.4 per cent, while Hong Kong’s Hang Seng index nosedived 13 per cent. In Europe, Germany’s DAX and France’s CAC 40 were each down more than 6 per cent at the open. 

 

Analysts warned that the Indian market could remain under pressure if other countries adopt retaliatory trade measures. “There has been a bloodbath in the US markets. It had to percolate to India. The markets are unlikely to bottom-out unless negotiations (with the US on tariffs) start,” said U R Bhat, co-founder of Alphaniti Fintech.

 

Sanjeev Prasad, co-Head of Institutional Equities at Kotak Institutional Equities, said the performance of the Indian market in the next few weeks will depend on how other countries respond to the US’s tariffs -- either through reconciliation or retaliation, particularly from China. “The behaviour of retail and institutional investors and the performance of other markets in a volatile setting” will also be crucial, he explained.

 

Broader indices also came under pressure. The Nifty Midcap 100 fell 3.6 per cent, while the Nifty Smallcap 100 was down 3.9 per cent -- both re-entering bear market territory. The Sensex and Nifty are now down 15 per cent from the record highs logged in September last year. 

All Sensex components, except Hindustan Unilever, closed lower. Tata Steel led the losses, declining 7.33 per cent, followed by Larsen & Toubro, which dropped 5.8 per cent. 

Among sectoral indices, the Nifty Metal index was the worst performer, falling 6.8 per cent. The Nifty Realty, Nifty Media and Nifty Auto were also among the biggest losers, each declining more than 3.8 per cent.