Nifty 50, Sensex end final trade of FY25 lower amid trade tensions; IT stocks hit hard

Stock market today: Indian markets ended the final trading session of FY25 in the red, as investors remained cautious ahead of the reciprocal tariffs set to be announced by US President Donald Trump on Wednesday. Meanwhile, investors are also closely watching the US Personal Consumption Expenditures data, set for release today, for clues on future interest rate movements.

The Nifty 50 closed the trade with a drop of 0.31% at 23,519, while the Sensex also wrapped up the session, falling 0.25% to settle at 77,414.

The broader markets mirrored the same trend, with the Nifty Midcap 100 index declining 0.32% to 51,672, while its peer, the Nifty Smallcap 100 index, also tumbled 0.15% to close at 16,095.

While the markets closed Friday’s session lower, the sharp recovery during the second half of March, driven by strong FPI inflows, has propelled the frontline indices to end FY25 with healthy gains.

The Nifty 50 gained 5.34% in FY25, while the Sensex rose nearly 5.40%. The majority of these gains came in the last 10 trading sessions, during which both indices soared over 5%, largely driven by overseas investors as they turned bullish on the world's fifth largest market after having withdrawn billions of rupees since October.

On the global front, trade tensions escalated further after Donald Trump announced a 25% tariff on automobile imports on Wednesday. He also threatened to impose 'far larger' tariffs on the European Union and Canada if they work together to counter U.S. trade measures.

The April 2 tariff announcement should reveal which countries and sectors the Trump administration will target as it tries to reduce a $1.2 trillion global goods trade deficit.

Heavy volatility is expected, with stock prices swinging wildly on factors such as how steep the tariffs will be, their duration, which countries and sectors they will target and any retaliatory measures from trading partners.

However, Trump had earlier indicated that he may grant 'a lot of countries' exemptions from reciprocal tariffs, while India is in active discussions with the White House to avoid the duties on major exports.

Sectoral Performance: IT stocks take the biggest hit; FMCG bucks the trend

Among the 13 major sectoral indices, only two managed to withstand the weak sentiment, with Nifty FMCG emerging as the top sectoral gainer, rising 0.59% on expectations that improving liquidity conditions in the financial system could boost sales. This was followed by Nifty Private Bank, which ended the session with a mild gain of 0.15%.

On the losing side, Nifty IT was the worst-performing sector, falling 1.76% amid concerns over a growth slowdown in the U.S. due to escalating trade tensions. Other sectoral indices, such as Nifty Realty, Nifty Auto, Nifty Metal, and Nifty Pharma, all ended the session with losses ranging between 0.65% and 1.45%.

Commenting on the today's market performance, Vinod Nair, Head of Research, Geojit Investments, said, "Asian markets are experiencing a new phase of consolidation as the latest U.S. tariff measures are expected to have a significant impact on major manufacturing economies. Additionally, a rise in Japan's CPI has contributed to the prevailing weakness."

"Domestically, the market’s upward momentum has stalled as investors evaluate the implications of these tariffs on the auto, ancillary, pharma and other sectors. Meanwhile, gold prices have reached a new high, on concerns that a deepening of the trade war could further deteriorate global economic health," he further added.

Technical Outlook

Rupak De, Senior Technical Analyst at LKP Securities, said, "The Nifty remained volatile on the first day of the new series before closing with weakness. Since Nifty made a high around the previous swing of 23,800, the index has been consolidating. Going forward, 23,400 might act as immediate support. A fall below 23,400 could take Nifty towards 23,200, where crucial support is placed."

"If Nifty holds above 24,200, it may witness further upside. On the other hand, if the Nifty does not fall below 23,400, it might rise towards 23,600 and higher," he stated.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.