Indian Stock Markets Plunge Amid Fears of US Tariffs; Shows Early Signs of Recovery

Indian stock markets experienced a sharp decline on Monday morning, driven by concerns over the implementation of US reciprocal tariffs, set to take effect from April 9.

The Nifty 50 and Sensex both saw significant drops, falling by 3.85% and 4.16%, respectively, in early trading.

All major sectoral indices were in the red, with the IT and metal sectors experiencing the largest declines, both down by 7%.

Midcap and smallcap stocks were also heavily affected, with both BSE indices dropping by 6% each during early trade.

Key stocks such as Tata Steel, JSW Steel, Tata Motors, and ONGC were among the worst-hit, contributing significantly to the market downturn.

Despite the initial turmoil at the opening bell, a slight recovery was seen as buying activity returned to the market.

This sparked hopes of stabilization after the heavy losses at the start of the day’s trading session.

Market Sentiment And Expert Predictions

Experts had anticipated a bearish opening for the equity markets on Monday, as indicated by the GIFT Nifty, which hovered around 22,090 early in the session, reflecting a steep decline of 867 points.

This signaled cautious sentiment among investors, driven primarily by weak global cues and a lack of strong domestic catalysts.

Also Read: Equity Market Outlook For The Upcoming Week Driven By Domestic And Global Factors

In the absence of positive local triggers, market participants are focusing on global market trends, crude oil prices, and institutional flows for further direction.

“Given the current global environment, the markets are reflecting a sense of caution.

Investors are waiting to see how international developments, particularly in relation to tariffs and global trade, will unfold,” said market experts.

Technical Outlook For Nifty 50

On the technical front, the Nifty 50 formed a bearish candle on the daily chart, signaling continued selling pressure at key resistance levels.

Experts observed immediate support for the index at 22,400 and 22,000, levels where the index has historically shown stability.

These support zones could act as reversal points, offering potential buying opportunities if favorable price action occurs.

On the upside, experts identified 23,000 as the immediate resistance level.

A sustained move above this level could pave the way for further gains, potentially pushing the index toward 23,100 and 23,400.

Similarly, the Bank Nifty index displayed a bearish candle on its daily chart, suggesting a rise in selling interest.

This pattern indicated further weakness in the banking sector, contributing to overall market negativity.

Institutional Activity Reflects Caution

Institutional activity also highlighted the bearish sentiment, with foreign institutional investors (FIIs) remaining net sellers for the fifth consecutive session.

On April 4, FIIs offloaded equities worth Rs 3,483 crore. Meanwhile, domestic institutional investors (DIIs), who had been net buyers in recent sessions, turned sellers, offloading equities worth Rs 1,720 crore on the same day.

As the market navigates through uncertainty, experts continue to monitor global developments, including the impact of US tariffs and domestic economic indicators, to gauge the potential direction of the stock market in the coming days.