Markets weaken ahead of US tariff imposition

Bengaluru: Ahead of the imposition of reciprocal tariffs by the United States on April 2, the Indian markets nosedived on Tuesday. Benchmark BSE Sensex dropped 1.94 per cent during the day’s trading, leading to wiping out Rs 3.44 lakh crore of investor wealth.

This was the worst day for equity markets in a month, and came just as the markets were moving out of bearish sentiments and were registering steady gains in March. Maximum selling was seen in IT and banking stocks, due to heightened uncertainty among investors.

Starting the new financial year on a losing note, the 30-share Sensex closed the session down 1.8 per cent or 1,390.41 points to settle at 76,024.51 as 28 of its components ended lower and only two advanced. During the day, the index plummeted 1.94 per cent. The NSE Nifty50, meanwhile, dropped 353.65 points or 1.50 per cent to 23,165.70.

US President Donald Trump plans to roll out a set of reciprocal tariffs on April 2, which he says will be “Liberation Day” for the world’s largest economy.

NEW DELHI: BSE SENSEX. PTI GRAPHICS.

“Amid heightened global volatility ahead of the anticipated US reciprocal tariff announcement, the domestic market witnessed a significant sell-off. Investors are eagerly awaiting the specifics of these tariffs while also keeping a close eye on ongoing negotiations for a potential Indo-US trade agreement,” said Vinod Nair, Head of Research, Geojit Investments Ltd.

“All major sectors came under pressure, with realty, IT, and financials among the top losers. However, the broader indices showed relative resilience, losing less than a percent each. Market participants are closely monitoring the ongoing tariff talks and their sectoral impact, leading to profit-booking following the recent rebound,” said Ajit Mishra, SVP Research at Religare Broking Ltd. 

Geojit’s Nair said that the IT sector was among the hardest hit due to its substantial exposure to the US market. Additionally, rising oil prices further dampened market sentiment.

NEW DELHI: NSE NIFTY. PTI GRAPHICS.

From the Sensex pack, HCL Tech, Bajaj Finserv, HDFC Bank, Bajaj Finance, Infosys, Titan, ICICI Bank, Sun Pharma, Reliance Industries, Larsen & Toubro, Tech Mahindra and NTPC were among the biggest laggards.

“Despite the short-term volatility related to tariffs, positive domestic factors such as an expected recovery in earnings growth, potential interest rate cuts by the RBI, and moderation in valuations are likely to provide stability and support for investors,” he said.

The BSE midcap gauge fell 1.04 per cent while the smallcap index went up marginally by 0.07 per cent.