Domestic stock markets suffered a sharp decline on Tuesday, with key indices plunging nearly 1.5 per cent as investors offloaded holdings ahead of the implementation of US President Donald Trump’s reciprocal tariffs on April 2.
The BSE Sensex tumbled 1.69 per cent, shedding 1,313 points to close at 76,105.82, while the broader Nifty dropped 1.41 per cent, or 332.15 points, settling at 23,187.2.
“With the US set to implement reciprocal tariffs from April 2, investors are choosing to play it safe rather than hold their positions. Many are booking profits made in the recent rally,” said Prashant Tapse, Senior Vice President (Research Analyst) at Mehta Equities.
Global markets are on edge, awaiting details of Trump’s tariff announcement scheduled for tomorrow. Market movements in the coming days will largely depend on the specifics of these tariffs and their impact on various countries and sectors, according to VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.
“India outperformed most global markets in March with a 6.3 per cent gain, fueled by foreign institutional investors (FIIs) turning buyers and the subsequent short covering. However, the future of this rally hinges on Trump’s tariff decisions,” Vijayakumar noted.
Should the tariffs be milder than anticipated, markets could see a rebound led by export-driven sectors such as pharmaceuticals and IT. However, if the measures are stringent, another market downturn is likely.
“Investors are best advised to adopt a wait-and-watch approach until the tariff details are clear,” Vijayakumar added.
Beyond trade policies, concerns over Trump’s recent remarks on Russia and Iran are also weighing on investor sentiment. On Sunday, Trump warned of secondary tariffs ranging from 25 per cent to 50 per cent on buyers of Russian oil if Moscow obstructs his efforts to end the war in Ukraine. He also threatened military action against Iran if it fails to comply with US demands to limit its nuclear program.
The market rout saw 26 of the 30 BSE-listed companies trading in the red by early afternoon. Among the biggest losers were HDFC Bank (down 3.07 per cent), Bajaj Finserv (3.01 per cent), Infosys Ltd (2.67 per cent), HCL Tech (2.59 per cent), and Sun Pharma (2.36 per cent).
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