Did Donald Trump's threat of reciprocal tariffs cause bloodbath on Dalal Street? Why did BSE crash before 'US Liberation Day'?

Did US President Donald Trump's announcement to impose a reciprocal tariff hit the BSE hard, pushing the benchmark index Sensex, which plunged 1,390 points on Tuesday?

Stock markets suffered and crashed a day before what Donald Trump has called the US Liberation Day, April 2. 

The 30-share BSE Sensex started the new financial year with heavy losses as it tanked 1,390.41 points, or 1.80% and settled at 76,024.51. It came under so much pressure that 28 of its components ended lower and only two advanced. During the day, the index plummeted 1,502.74 points, or 1.94%, to 75,912.18.

NSE Nifty drops 353.65 points

The NSE Nifty dropped 353.65 points, or 1.50%, to 23,165.70.  The key indices logged their steepest single-day losses in a month.

US President Donald Trump plans to roll out a set of reciprocal tariffs on April 2, which he says will be "Liberation Day" for the US.

From the Sensex pack, HCL Tech, Bajaj Finserv, HDFC Bank, Bajaj Finance, Infosys, Titan, ICICI Bank, Sun Pharma, Reliance Industries, Larsen & Toubro, Tech Mahindra and NTPC were among the biggest laggards.

Among gainers, IndusInd Bank jumped over 5% while Zomato ended marginally higher.

IT shares suffers most

"Amid heightened global volatility ahead of the anticipated US reciprocal tariff announcement tomorrow, the domestic market witnessed a significant sell-off today.

"The IT sector was among the hardest hit due to its substantial exposure to the US market, and real estate stocks fell following Maharashtra's upward revision of ready reckoner rates, which affect property valuations," Vinod Nair, Head of Research, Geojit Investments Limited, said.

"Uncertainty surrounding the US reciprocal tariff rates ahead of the April 2 deadline and its potential impact on global trade led to a negative opening, which worsened as the session progressed," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.

BSE midcap falls

The BSE midcap gauge tanked 1.04% while the small-cap index went up marginally by 0.07%. 

BSE telecommunication and oil & gas were the gainers. In the broader market, shares of Vodafone Idea rose by nearly 19% to close at Rs 8.10 per share as the government converted Rs 36,950 crore of dues into equity to take its shareholding in the struggling telco to 49% 

Among other Asian markets, Seoul, Tokyo, Shanghai and Hong Kong settled in the positive territory.

Markets in Europe were also trading higher. US markets ended mostly higher on Monday.

FIIs sale equities worth Rs 4,352 crore

Foreign institutional investors (FIIs) offloaded equities worth Rs 4,352.82 crore on a net basis on Friday, according to exchange data.
Stock markets were closed on Monday for Eid-Ul-Fitr.

Global oil benchmark Brent crude climbed 0.12% to USD 74.86 a barrel.

In the 2024-25 financial year, Sensex jumped 3,763.57 points, or 5.10%, and Nifty climbed 1,192.45 points or 5.34%. On Friday, Sensex declined 191.51 points, or 0.25%, to settle at 77,414.92. Nifty dropped 72.60 points, or 0.31%, to 23,519.35.

 

(With inputs from PTI)