Markets plunge over 1% as global trade war fears escalate; metal stocks hit hardest 

Equity markets plummeted on Friday with the benchmark indices shedding over 1 per cent as fears of a global trade war and recession concerns rattled investor sentiment following sweeping tariff announcements by US President Donald Trump. The Sensex crashed 930.67 points or 1.22 per cent to close at 75,364.69, while the Nifty tumbled 345.65 points or 1.49 per cent to end at 22,904.45.

The market capitalisation of all listed companies on the BSE shrunk by over ₹1 trillion, slipping to ₹40,409,600.62 crore from ₹41,416,218.49 crore in the previous session, reflecting the broad-based sell-off that gripped the markets.

“The recent implementation of higher-than-anticipated US tariffs has had a significant impact on global markets, triggering a bearish trend as investors assess the broader implications. The likelihood of retaliatory measures against the US has further heightened uncertainty,” said Vinod Nair, Head of Research, Geojit Investments Ltd.

Metal stocks bore the brunt of selling pressure, with Tata Steel emerging the biggest loser among Nifty components, plunging 8.43 per cent to close at ₹140.67. Hindalco followed closely with an 8.07 per cent decline to ₹600, while ONGC fell 7.07 per cent to ₹226.10. Tata Motors and Cipla rounded out the top losers, with drops of 5.94 per cent and 5.29 per cent, respectively.

The market breadth was heavily skewed in favour of decliners, with 2,820 stocks falling against 1,126 advances on the BSE. Only 130 stocks remained unchanged, while 89 stocks touched their 52-week lows, compared to 66 hitting 52-week highs.

“Benchmark indices extended their losing streak to a second session on April 4, falling over a per cent each, as risk-off sentiment took over global markets amid fears of a trade war on the back of US President Donald Trump’s reciprocal tariffs,” noted Bajaj Broking Research in their market commentary.

The broader market experienced even steeper declines, with the Nifty Midcap 100 falling 2.91 per cent to 50,645.95 and the Nifty Smallcap 100 plummeting 3.56 per cent. The sectoral performance remained broadly negative, with only the FMCG index managing to stay in positive territory.

“Initially, the index found support at the crucial 22,900 level. However, sentiment remains weak, and a further decline from the current level could trigger additional market correction,” warned Rupak De, Senior Technical Analyst at LKP Securities.

Bajaj Finance led the gainers, rising 1.69 per cent to ₹8,739.90, followed by Tata Consumer Products (1.59 per cent), HDFC Bank (1.22 per cent), Apollo Hospitals (0.95 per cent), and Nestle India (0.57 per cent).

In the derivatives segment, long build-up was observed in stocks such as PNB Housing, Max Healthcare, Axis Bank, ICICI Bank, and Torrent Pharma, while significant short build-up was seen in Hindustan Zinc, Persistent Systems, Coforge, CG Power, and Tata Motors.

On the commodities front, gold witnessed profit-booking with prices down by ₹650 at ₹89,450 on MCX. “Gold witnessed profit booking with prices down by ₹650 at ₹89,450 in MCX, following the official announcement of tariff pricing,” said Jateen Trivedi, VP Research Analyst at LKP Securities.

Oil markets witnessed a dramatic plunge, with WTI crude tumbling 6.4 per cent on Thursday. “WTI crude oil plummeted by 6.4 per cent on Thursday, marking its steepest decline since 2022, falling below $66 per barrel, following OPEC+’s announcement that it plans to increase oil production more than expected in May,” explained Kaynat Chainwala, AVP-Commodity Research, Kotak Securities.

The Indian rupee gained strength against the dollar, closing at 85.23, up by 20 paise. “Rupee traded positive with gains of 0.16rs at 85.20, supported by weakness in crude prices, which helped the rupee maintain strength,” said Jateen Trivedi.

Foreign Institutional Investors (FIIs) continued their selling spree, offloading ₹10,246.51 crore worth of Indian equities in the first three days of April. “FPI flows are expected to remain volatile,” cautioned Shrikant Chouhan, Head Equity Research, Kotak Securities.

FIIs/FPIs reported a net outflow of ₹2,806 crore, while DIIs registered a net inflow of ₹221.47 crore. Clients saw a net outflow of ₹203.16 crore, NRIs recorded a net inflow of ₹4.34 crore, and proprietary traders contributed a net inflow of ₹199.06 crore.

Looking ahead, market participants will closely monitor developments on US tariff policies, the upcoming RBI monetary policy decision, and the commencement of the Q4FY25 earnings season. “As Q4 approaches, a sequential improvement in corporate performance is anticipated. However, prevailing weak market sentiment suggests that the phase of consolidation may persist in the near term,” added Vinod Nair.

Technical analysts suggest the Nifty could face further pressure if it breaks below the 22,800 level. “The next support for Nifty is seen near 22700, where 61.8 per cent retracement of the entire rally seen from 21964 to 23869 is placed,” said Nandish Shah, Deputy Vice-President, HDFC Securities.

As global markets grapple with the implications of heightened trade tensions, Indian equity indices could experience continued volatility in the coming sessions, with investors remaining cautious amid concerns of potential retaliatory measures from major trading partners and their impact on global economic growth.

Published on April 4, 2025