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Key indices witness heavy sell-off; Nifty below 22,200 mark
Apr-07-2025

Indian equity benchmarks witnessed a heavy sell-off on Monday, marking the third straight session of losses, as investor sentiment took a major hit amid rising fears of a global recession and a full-blown trade war triggered by Donald Trump’s reciprocal tariffs.

Some of the important factors in today’s trade: 

RBI MPC Meeting: Market participants remained on sidelines as the Reserve Bank of India's monetary policy committee began its three-day deliberations on key interest rates. The decision of the six-member rate-setting panel will be announced on Wednesday. 

India's exports to US may drop by $5.76 billion due to tariffs: GTRI said India's merchandise exports to the US from sectors such as marine items, gold, electrical, and electronics are expected to decline by $5.76 billion this year due to increased American duties. 

India should expand PLI scheme as Trump announces reciprocal tariffs: SBI in its latest report has said that India should strengthen its Production-Linked Incentive (PLI) schemes in light of growing global trade competitiveness, especially after U.S. President Donald Trump announced reciprocal tariffs on several countries, including India. 

Rupee falls against Dollar: Indian rupee declined against the US dollar amid the wide-spread global turbulence over escalated tariff war and fear of a global economic slowdown.

Securitisation volumes surge 24% to record Rs 2.35 lakh crore in FY25: A report by rating agency Crisil said securitisation volumes in FY25 increased 24 per cent to hit the highest level of Rs 2.35 lakh crore. The volumes of securitisation were lower in the fourth quarter at Rs 58,000 crore as against Rs 63,000 crore and Rs 70,000 crore recorded in the preceding two quarters. 

Global market meltdown: European markets were trading lower as investor sentiment was hit by unfavorable global market conditions after China announced retaliatory tariffs on U.S. goods in reaction to President Donald Trump's new levies. Asian markets settled deeply in red on Monday as a global sell-off deepened and investors fled to the relatively safe-haven assets such as bonds, the Japanese yen and the Swiss Franc on signs that the Trump's administration is unlikely to soften its sweeping tariff regime.  

Finally, the BSE Sensex fell 2226.79 points or 2.95% to 73,137.90, and the CNX Nifty was down by 742.85 points or 3.24% to 22,161.60.   

The BSE Sensex touched high and low of 73,403.99 and 71,425.01 respectively. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices ended in red; the BSE Mid cap index fell 3.46%, while Small cap index was down by 4.13%.

The top losing sectoral indices on the BSE were Metal down by 6.22%, Realty down by 5.69%, Basic Materials down by 4.68%, Industrials down by 4.57% and Capital Goods down by 4.34%, while there were no gaining sectoral indices on the BSE. 

The lone gainer on the Sensex was Hindustan Unilever up by 0.25%. On the flip side, Tata Steel down by 7.73%, Larsen & Toubro down by 5.78%, Tata Motors down by 5.54%, Kotak Mahindra Bank down by 4.33% and Mahindra & Mahindra down by 4.11% were the top losers. 

Meanwhile, CareEdge Ratings in its report 'Sectoral Impact of US Reciprocal Tariff: Neutral to Negative’ has said that the imposition of high reciprocal tariffs by the US on other competing nations raises the possibility of increased dumping by those nations in India, as well as in other export markets, which could negatively impact certain sectors. The report said the expected direct impact of US reciprocal tariffs would vary, with no impact expected on pharmaceuticals since they are exempt from reciprocal tariffs for now.

According to the rating agency, the impact is expected to be largely neutral for electronics, textiles, agricultural products, chemicals, and automobiles and parts. At the same time, it would be negative for gems and jewellery. During 2023-24, India's aggregate merchandise exports to the US stood at $77.5 billion compared to its imports from the US at $42.2 billion. Out of India's total exports to the US, the sectors in descending order of value are electronics, textiles, pharmaceuticals, gems and jewellery, agricultural products, chemicals and automobiles and parts.

Until now, the US has been charging an average tariff of 3.50 per cent on imports of goods from India with respect to the above-said sectors, which is now being increased uniformly to 26 per cent in the form of a reciprocal tariff. Reciprocal tariff imposed by the US on other nations who are India's major competitors in most of the above sectors is higher than us - Vietnam at 46 per cent, Bangladesh at 37 per cent, China at 34 per cent, Taiwan at 32 per cent, Indonesia at 32 per cent and Pakistan at 29 per cent, which augurs well for key export sectors of India.

Since assuming office for his second term, President Trump has reiterated his stance on tariff reciprocity, emphasising that the United States will match tariffs imposed by other countries, including India, to ensure fair trade. On April 2, the US President issued an executive order on reciprocal tariffs, imposing additional ad valorem duties ranging from 10 per cent to 50 per cent on imports from all trading partners. The baseline duty of 10 per cent will be effective from April 05, 2025, and the remaining country-specific additional ad valorem duty will be effective from April 09, 2025. The additional duty on India is 26 per cent.

The CNX Nifty traded in a range of 22,254.00 and 21,743.65. There were 2 stocks advancing against 47 stocks declining, while 1 stock remained unchanged on the index.  

The few gainers on Nifty were Hindustan Unilever up by 0.24% and Zomato up by 0.22%. On the flip side, Trent down by 14.70%, JSW Steel down by 7.53%, Tata Steel down by 7.26%, Hindalco down by 5.92% and Tata Motors down by 5.34% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 313.12 points or 3.89% to 7,741.86, France’s CAC fell 325.32 points or 4.47% to 6,949.63 and Germany’s DAX lost 877.46 points or 4.25% to 19,764.26.

Asian markets settled deeply in red on Monday tracking Wall Street’s fall last Friday as global sell-off worsened on escalating trade tensions and recession fears in the United States and on signs that the US President Donald Trump's administration is unlikely to soften its sweeping tariff regime. Chinese shares slumped due to panic selling following China’s retaliation against Donald Trump's sweeping tariffs. Japanese shares declined sharply as Donald Trump reiterated his resolve on tariffs and indicated he wasn't concerned about the massive selloffs.

Asian Indices

Last Trade            

Change in Points

Change in %      

Shanghai Composite

3,096.58

-245.43

-7.93

Hang Seng

19,828.30

-3,021.51

-15.24

Jakarta Composite

--

--

--

KLSE Composite

1,443.80

-60.34

-4.01

Nikkei 225

31,136.58

-2,644.00

-8.49

Straits Times

3,540.50

-285.36

-8.06

KOSPI Composite

2,328.20

-137.22

-5.89

Taiwan Weighted

19,232.35

-2,065.87

-10.74
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