Winning Bizness Economic Desk

Mumbai.

• Sensex closed 2,226 points down at 73,137; Nifty slipped 742 points to 22,161
• Metal, Realty, Auto, IT sectors dragged indices down
• Tata Steel, Tata Motors, L&T stocks fell 7%
• Investors lost Rs 15 lakh crore in a day
• Asian markets witnessed up to 13% decline
• US-China tariff war, economic slowdown fears behind sell-off

Indian equity markets witnessed a sharp sell-off on Monday, April 7, marking the second-largest fall of the year. The Sensex plunged 2,226 points or 2.95% to close at 73,137. Meanwhile, the Nifty dropped 742 points or 3.24% to end the day at 22,161. This steep decline is the worst since June 4, 2024, when the market had tumbled 5.74%. Out of the 30 Sensex stocks, 29 ended in the red, with Tata Steel, Tata Motors and Larsen & Toubro losing up to 7%. Zomato was the only gainer among major counters, rising marginally by 0.17%.

Sectoral Bloodbath on Dalal Street

All NSE sectoral indices ended in losses. Nifty Metal index was the worst performer, plunging 6.75%, followed by Realty, which dipped 5.69%. Auto, Pharma, PSU Banks, Oil & Gas, and IT stocks also bore the brunt, closing 4% lower. The correction mirrored global cues and escalating geopolitical tensions that spooked investors. Notably, smallcap and midcap stocks were hit harder. BSE SmallCap index dropped 6.20% while the MidCap index was down 4.60%.

Three Key Reasons Behind Market Crash

• 1. Trump’s Reciprocal Tariffs: The US announced reciprocal tariffs on several nations. India faces a 26% tariff, while China, EU, South Korea, Japan, Vietnam, and Taiwan will be levied tariffs ranging from 20% to 46%.
• 2. China Hits Back: China retaliated by imposing 34% additional tariffs on US goods, effective from April 10. This move was in response to the April 3 tariff announcement by US President Donald Trump, which slapped a 34% additional tariff on Chinese imports.
• 3. Global Slowdown Fears: Higher tariffs could dampen consumer demand due to rising prices, raising fears of a global economic slowdown. Falling crude prices also signal weakening economic activity. Brent crude dropped 4% to fall below $64 — the lowest in four years.

Massive Wealth Erosion for Investors

The heavy sell-off led to a sharp erosion in investor wealth. The market capitalisation of BSE-listed companies fell by approximately Rs 15 lakh crore. As of Friday, April 4, the market cap stood at Rs 404 lakh crore, which declined to around Rs 389 lakh crore by the end of Monday’s session. This massive drop reflects investors’ jittery sentiment amid global uncertainty.

Asian Markets Crumble Alongside India

The rout wasn’t limited to Indian markets. Asian indices suffered severe losses with Hong Kong’s Hang Seng index crashing 13.22% (3,021 points) to close at 19,828. China’s Shanghai Composite dropped 7.34% while Japan’s Nikkei ended 7.83% lower. South Korea’s Kospi slipped 5.57%. US markets also saw sharp falls on April 3, with the Dow Jones losing 3.98%, S&P 500 down 4.84%, and Nasdaq Composite declining 5.97%. Market expert Jim Cramer even predicted a Black Monday-like crash, warning of a potential 22% drop in US stocks.

GIFT Nifty Recovers, But Volatility Remains High

Despite the turmoil, GIFT Nifty managed to recover from an 800-point drop to close flat at 22,305. The benchmark had previously slumped 930 points on April 4. That day, the Sensex had fallen by 1.22% and Nifty by 1.49%. Sectoral indices such as Nifty Metal, Pharma, Realty, and IT had lost between 4% to 6% in that session, continuing their downward trend into the following week.