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Sensex, Nifty50 traded lower, as investors awaited clarity regarding reciprocal tariffs set to be levied from April 2; Key points for investors
Why is stock market falling today?
Why Is Stock Market Falling? Indian benchmark indices traded lower on Tuesday, pressured by declines in banking and IT stocks, as uncertainty loomed over Donald Trump’s impending tariff announcement.
At its lowest point of the day, BSE Sensex was trading 1,218 points, or 1.57%, lower at 76,201. Nifty50 was down 327 points, or 1.39%, trading at 23,192 around 11:53 am.
IT and Banking Stocks Lead Declines
“US government policy changes related to tariffs have caused uncertainty over the last three weeks of the quarter. This could affect client decision-making and slow down recovery in discretionary spending,” said ICICI Securities.
Infosys was the worst-performing stock on the Sensex, shedding 2.86% to Rs 1,525. Other IT giants, including HCL Tech, TCS, and Tech Mahindra, also saw declines of up to 2.4%.
Private sector banks were also under pressure, with HDFC Bank and Axis Bank each dropping 2.3%. Bank stocks, which had previously outperformed other lenders due to a “flight-to-safety” narrative, faced selling pressure. However, Kotak noted that asset quality concerns appear less severe than anticipated, with recoveries visible in unsecured loan segments.
Financial stocks Bajaj Finance and Bajaj Finserv fell 2% each. Among other laggards, Sun Pharma dropped 1.76% to Rs 1,704, making it one of the worst-performing Sensex stocks.
Impact of Trump’s Tariff Policy
US President Donald Trump has declared April 2 as ‘Liberation Day,’ when the US will impose reciprocal tariffs on various countries. This has raised concerns among investors about potential negative impacts on earnings, especially for Indian pharmaceutical firms.
“Indian pharma stocks have underperformed leading up to this event, as investors fear potential earnings setbacks if generic drug companies fail to pass on the impact of tariffs,” said Nomura. “Since September 2024, when Trump’s election prospects improved, concerns around tariffs have intensified.”
VK Vijayakumar of Geojit Investments noted that global markets are keenly watching the details of Trump’s tariff announcement.
“The market reaction will depend on the specifics of the tariffs and their impact on different sectors and economies. If the tariffs are severe, markets could experience another downturn. Investors may prefer to wait and react once more clarity emerges,” he added.
FII/DII Activity
Foreign Institutional Investors (FIIs) remained net sellers on March 28, offloading equities worth Rs 4,352 crore. Meanwhile, Domestic Institutional Investors (DIIs) continued their buying spree for the second consecutive day, purchasing equities worth Rs 7,646 crore.
Crude Oil Surges on Supply Concerns
Oil prices climbed about 2% to a five-week high on Monday, amid concerns over potential supply disruptions if Trump follows through on threats to impose more tariffs on Russia or initiate military action against Iran.
Brent crude rose $1.11 (1.5%) to settle at $74.74 per barrel, while US West Texas Intermediate (WTI) crude gained $2.12 (3.1%) to close at $71.48 per barrel.
Rupee Weakens Against Dollar
The Indian rupee depreciated by 32 paise to 85.47 against the US dollar in early trade. Meanwhile, the dollar index, which tracks the greenback against a basket of six major currencies, slipped 0.14% to 104.04.
Markets remain volatile as investors await further clarity on US tariff policies. The coming days will be crucial in determining the trajectory of global and Indian equities.
Disclaimer:Disclaimer: The views and investment tips by experts in this News18.com report are their own and not those of the website or its management. Users are advised to check with certified experts before taking any investment decisions.
