US markets plunge on Trump tariffs as Indian indices show resilience 

Indian markets opened lower but demonstrated relative resilience Friday morning following a massive selloff in US markets triggered by President Donald Trump’s sweeping tariff announcements. While the Sensex traded at 75,819.09, down 476.27 points (0.62 per cent) and Nifty at 23,066.15, down 183.95 points (0.79 per cent) at 9.45 am after opening at 76,160.09 and 23,190.40, respectively, domestic indices fared better than their global counterparts.

Wall Street experienced its worst one-day percentage losses since 2020, with the S&P 500 plunging 4.85 per cent, Nasdaq crashing 5.99 per cent and Dow falling 3.98 per cent. The selloff wiped out approximately $2.4 trillion in market value from S&P 500 companies, marking the largest single-day loss since March 2020.

“Trump Tariffs Stir Recession Fears,” stated Devarsh Vakil, Head of Prime Research at HDFC Securities. “The bruising selloff across markets came after Trump on Wednesday announced Washington’s steepest trade barriers in more than 100 years, sending investors scrambling for safety assets.”

Trump’s announcement of reciprocal tariffs—set at 26 per cent for India compared to 54 per cent for China and 46 per cent for Vietnam—has created significant market uncertainty. “Bank Nifty absorbed the ‘Trump Tariff Blow’ and edged upward, but uncertainty remains as markets crave stability,” noted Prashanth Tapse, Senior VP (Research) at Mehta Equities.

Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, cautioned that “Markets are going through heightened uncertainty which is likely to last some time. A trade war has been triggered by Trump and retaliatory tariffs from China, EU and others are on the cards.”

Despite global concerns, many analysts see potential advantages for India. VLA Ambala, Co-Founder of Stock Market Today, observed, “The timely conclusion of a bilateral trade agreement between India and the US offers optimism that it could help reduce the impact of the tariffs and offer respite to our exporters.”

Sectoral performances were mixed. The IT index corrected sharply, shedding over 4 per cent, becoming the biggest loser as concerns mounted about potential impact on offshore revenues. Meanwhile, the pharma index gained over 2 per cent after Trump excluded drug exports from new tariffs.

Among individual stocks, HDFC Bank was the top gainer on NSE, rising 2.39 per cent, followed by Tata Consumer at 1.59 per cent. On the losing side, ONGC slumped 5.90 per cent, with Hindalco (-4.98 per cent) and Tata Motors (-4.65 per cent) also posting significant losses.

Commodity markets suffered heavily, with crude oil experiencing its largest single-day fall in three years, plunging 7 per cent to below $70 per barrel. “Crude oil prices plunged after the US President announced heavy reciprocal trade tariffs, triggering fears of slower global demand,” explained Rahul Kalantri, VP Commodities at Mehta Equities.

Gold and silver prices also declined significantly, with gold finding support at $3,072-3,040 and facing resistance at $3,112-3,135.

Investment strategists recommend focusing on domestically oriented sectors. “Domestic demand-oriented sectors are the most attractive investment opportunities in the current tariff environment. Cement, building materials, banks and FMCG companies stand to outperform as they rely primarily on domestic consumption rather than international trade,” advised Vaibhav Porwal, Co-Founder of Dezerv.

From a technical perspective, Sameet Chavan, Head Research at Angel One, notes that “Nifty has formed matching lows around the 23100 zone for the past three sessions,” suggesting this level represents a key support area. “As long as 23100 holds on a closing basis, the outlook remains positive, with dips presenting buying opportunities.”

Investors are now closely watching for Fed Chair Jerome Powell’s speech scheduled for today, which could provide insights into the US economic outlook following Trump’s tariff announcements.

Analysts generally believe that while global trade tensions will create volatility, India’s consumption-driven economy positions it to weather the storm better than many other markets. “India’s economic revival remains on track, though with more selective opportunities than before and requiring more strategic investment approaches,” concluded Porwal.

Published on April 4, 2025