Sensex Crashes 1,500 Points as US Tariff Worries and Rising Crude Prices Weigh on Markets

Investments Indian Investments

Posted by NewAdmin on 2025-04-01 08:40:00 |

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The Indian equity market witnessed a sharp decline on Tuesday, primarily driven by IT and real estate stocks. Investor sentiment took a hit amid growing concerns over US President Donald Trump’s proposed reciprocal tariffs. As a result, the BSE Sensex plummeted by 1,502.94 points or 1.94 percent to touch an intraday low of 75,912.18, while the NSE Nifty dropped by 382.95 points or 1.62 percent, settling at 23,136.40. Both indices opened significantly lower, showed some recovery during early trading, but eventually slipped again as selling pressure intensified.

One of the primary factors influencing the market downturn was Trump’s plan to introduce reciprocal tariffs. Dubbed "Liberation Day" for the US, the rollout is scheduled for April 2. The president has already imposed tariffs on several key trading partners, including Canada, Mexico, and China, and is contemplating additional levies on automobiles, steel, aluminium, copper, pharmaceuticals, semiconductors, and lumber. This development has raised concerns about its potential global economic impact. Market participants are particularly apprehensive about the lack of clarity on how these tariffs would affect various sectors and countries.

Another factor weighing on the market was the surge in crude oil prices. Brent crude, the global oil benchmark, rose by 1.51 percent to $74.74 per barrel. For India, a major importer of oil, rising crude prices pose a risk to the import bill and can adversely impact inflation and economic growth. This upward trend in crude prices further contributed to the negative sentiment in the equity markets.

Adding to the woes, recession fears in the United States have also spooked investors. Goldman Sachs increased the probability of a recession in the US from 20 percent to 35 percent, highlighting the potential adverse effects of Trump's tariffs. The brokerage also pointed out the possibility of a technical recession in the European Union, which could further strain global markets. These recessionary fears added to the cautious approach adopted by investors.

Foreign institutional investors resumed selling after a brief phase of buying, offloading equities worth Rs 4,352.82 crore. This selling pressure from FIIs added to the already fragile sentiment, pushing indices deeper into the red. Additionally, profit booking after a recent rally also contributed to the downturn. The Nifty and Sensex had gained nearly 5.4 percent over the past eight sessions, which led to elevated valuations and made some traders wary of holding positions at higher levels. Consequently, profit booking became a key reason for the sharp fall, particularly in heavyweight stocks.

The volatility index, India Vix, also surged by 10 percent to 13.97, indicating a rise in market anxiety. According to market experts, for a positive turnaround, the Nifty would need to decisively move above the 23,700-23,750 range. Failing to do so could result in sideways movement with a downward bias, aiming for 23,300. A breakout from the range of 23,750-23,300 could potentially trigger a directional shift of around 250 points.

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