Looming U.S. reciprocal tariffs spook stock markets, Sensex falls 1,390 points

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| Photo Credit: Reuters

The first day of the new financial year disappointed investors as frontline stock indices fell nearly 2%, reflecting fears about the impending global tariffs that the United States plans to implement from April 2. Gold prices, on the other hand, hit a new record, as investors rushed to buy the metal known as a safe haven.

While the S&P BSE Sensex plunged 1,390 points or 1.80% to 76,025 points, led by a fall in technology, finance and banking stocks, the NSE Nifty-50 index slumped by 354 points or 1.5% to 23,166 points, amid high volatility.

“Major indices plummeted nearly 2%, reflecting anxieties surrounding the economic implications of U.S. President Donald Trump’s imminent reciprocal tariffs scheduled for implementation April 2,” said Devarsh Vakil, head of Prime Research at HDFC Securities.  

Crash in IT, banking, realty stocks

The Nifty Realty, Consumer Durables and IT indices were major losers while Media and OiL & Gas were the two indices which ended in the green.

“Smaller stocks outperformed the benchmark indices on the first day of the new year. Advancing shares outnumbered the declining ones after four days, with the advance-decline ratio standing at 2 on the BSE, the highest since March 21,” Mr. Vakil said.

Gold prices hit a new record of ₹91,120 per 10 gm in the spot market and $3,120 per ounce in the global markets amid heightened demand for the safe haven metal, while the U.S. dollar index climbed to 103.9 against major currencies.

Volatility to continue

“The near-term market trajectory hinges on Wednesday’s tariff announcement details. Should Trump unveil milder-than-anticipated tariffs, the markets may experience a rebound, led by export-oriented sectors including pharmaceuticals and information technology. Conversely, severe tariff impositions could trigger further market deterioration,” Mr. Vakil added.

“After a strong March, the new financial year has begun on a disappointing note. Despite being a truncated week, market action remains eventful, particularly with global trade tariff developments. The India Volatility Index (VIX) surged by nearly 10%, indicating heightened volatility ahead,” noted Rajesh Bhosale, an equity technical analyst at Angel One.

“Given the ongoing geopolitical uncertainties and the likelihood of volatile swings, it is advisable to remain cautious, avoid complacency, and limit overnight exposure,” he emphasised.