Sensex And Nifty Dive 5 Per Cent Along With Asian Stock Markets Amid Trump's Reciprocal Tariff Move

On Monday (7 April), Indian stock markets saw a 5 per cent dive, mirroring Asian shares, due to rising worries about an intensification in trade conflicts after the US announced retaliatory tariffs.

The 30-share Sensex of BSE experienced a significant drop of 5.19 per cent, resulting in a decrease of 3,914 points and opening at 71,449.94. Similarly, the wider Nifty fell 5 per cent, losing 1,146.05 points and starting at 21,758.4.

Last week, US President Donald Trump declared mutual tariffs on several of the US's trade partners, one of which is India. India is confronted with a tariff increase of 26 per cent. As of April 5, a blanket tariff of at least 10 per cent has been implemented on all imports coming into the US.

China promptly declared retaliatory tariffs on Friday, equating to the US's corresponding tariff rate of 34 per cent.

“Investor confidence plummeted after US reciprocal tariffs triggered retaliatory measures from China. This escalating trade war has profoundly unsettled investors and intensified fears of an impending recession,” HDFC Securities' Prime Research head Devarsh Vakil said.

The steep decline in US market downturns diminished hopes for a rebound, and the intensified selling by foreign institutional investors in Indian markets amplified the bearish sentiment, he noted.

In the Asian stock market, Hang Seng plummeted by 10.45 per cent, while Shanghai Composite dropped 6.34 per cent. Additionally, Nikkei 225 suffered a fall of 6.6 per cent, and KOSPI declined by 4.83 per cent.

All broad market indices in the domestic market experienced significant selling pressure. There was a steep drop of 5.42 per cent in Nifty Smallcap 100 and a decline of 4.34 per cent in Nifty Midcap 100.

In the realm of sectoral indices, Nifty Metal plunged by 6.98 per cent, while Nifty Oil and Gas dropped by 5.1 per cent. Similarly, Nifty IT plummeted 5.93 per cent, and Nifty Auto declined by 4.6 per cent.

The companies listed on the NSE that experienced the most significant losses were Tata Steel with a 10 per cent decrease, Tata Motors with an 8.31 per cent drop, Hindalco Industries losing 7.23 per cent, Infosys falling by 7.1 per cent, and Tech Mahindra with a 6.77 per cent decline.