Indian stock markets witnessed a massive meltdown on Monday, with benchmark indices opening sharply lower amid a global sell-off sparked by US President Donald Trump’s announcement of sweeping tariffs. The panic across world markets over fears of a global recession deeply rattled investors, leading to one of the steepest opening crashes in Indian market history since the Covid pandemic.
The BSE Sensex opened nearly 3,100 points lower, falling close to 5%, while the Nifty dropped by 1,200 points. The sell-off was broad-based, affecting all 13 major sectors. Particularly hit were small-cap and mid-cap stocks, which fell 10% and 7.3%, respectively. Information technology stocks, many of which derive a substantial portion of their revenue from the US, plunged around 7%, reflecting concerns over reduced earnings due to the downturn in the American economy.
Global Sell-Off and Asian Market Turmoil
The Indian market slump mirrored sharp losses across global indices. The MSCI Asia ex-Japan index slid 6.8%, while Japan’s Nikkei 225 fell 6.5% in early trade. An index of Japanese bank stocks nosedived by as much as 17%, reflecting investor anxiety over a tariff-induced global economic slowdown. The broader sentiment across Asia remained negative as markets reeled under pressure from the unexpectedly aggressive tariff move by the US.
In the two days following Donald Trump’s April 2 announcement of new tariffs, US markets lost $5.4 trillion in value. The Nasdaq officially entered bear market territory on Friday, and the S&P 500 reached its lowest level in nearly a year. Federal Reserve Chair Jerome Powell acknowledged the uncertainty, noting the new tariffs are larger than anticipated and could significantly impact inflation and growth prospects.
Tariff Fears and Investor Sentiment
With no clear signal on how long the trade war tensions will persist, equity strategists have warned that further corrections are likely unless global policymakers intervene or soften their stance. Maki Sawada of Nomura Securities said markets are currently pricing in only negative outcomes. She added that any signs of economic support measures or flexibility in tariff policy could potentially reverse the downward trend.
Indian investors, already cautious due to global cues, joined the global selling spree as worries over inflation, earnings downgrades, and recessionary trends intensified. As markets await further clarity, volatility is expected to remain high in the coming days.
