The new financial year began with a sharp decline on Dalal Street, as bearish trends dominated the market. On April 1, benchmark indices Sensex and Nifty 50 suffered significant losses, driven by a sharp sell-off in banking and IT stocks.
Sensex and Nifty Decline Sharply
By 11:40 AM on Tuesday, the BSE Sensex plunged 1,189.29 points, or 1.54%, reaching 76,225.63. The broader Nifty 50 index also faced a downturn, dropping 306.6 points, or 1.3%, to hover around 23,212.75.
In both indices, major banking and IT stocks led the decline. Shares of Bajaj Finserv, HDFC Bank, Bajaj Finance, Infosys, and HCL Tech emerged as the top losers, dragging the overall market sentiment lower.
Trump’s Tariff Plans Weigh on Investor Sentiment
Investor confidence remained weak due to concerns over former US President Donald Trump’s planned reciprocal tariffs set to take effect on April 2, a move he has labeled as “Liberation Day” for the US.
The US has already imposed tariffs on key trade partners, including Canada, Mexico, and China. Additionally, new duties are expected on automobiles, steel, aluminum, copper, pharmaceuticals, semiconductors, and lumber.
Commenting on the market reaction, Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, stated, “If the tariffs are lower than feared, the market could witness a rally, especially in externally linked sectors like pharmaceuticals and IT. However, if the tariffs are severe, another round of market downturn could follow. Investors should wait and watch before reacting to the final details.”
Foreign Investors Exit While Domestic Investors Buy
On March 28, Foreign Institutional Investors (FIIs) continued their selling spree, offloading equities worth Rs 4,352 crore. Meanwhile, Domestic Institutional Investors (DIIs) extended their buying trend for the second straight day, purchasing stocks worth Rs 7,646 crore.
Rupee Weakens Against the US Dollar
The Indian rupee depreciated further, losing 32 paise to reach 85.47 against the US dollar in early trade. At the same time, the dollar index, which measures the greenback’s strength against six major global currencies, declined by 0.14%, settling at 104.04.
With global uncertainties and trade concerns weighing on sentiment, market volatility is expected to persist in the near term.