Sensex crashes over 900 points; Nifty 50 ends below 23,000; Trump tariffs, other key factors behind stock market selloff

Indian stock market crash today: A day after showing remarkable resilience amid a sharp global sell-off, the Indian stock market witnessed deep losses in intraday trade on Friday, April 4. Benchmark indices, the Sensex crashed over 900 points, while the Nifty 50 dropped below 23,000 during the session, dragged down by weak global cues.

Finally, the Sensex closed at 75,364.69, with a loss of 931 points, or 1.22 per cent, while the Nifty 50 settled 346 points, or 1.49 per cent, lower at 22,904.45.

The BSE Midcap index plunged 3.08 per cent and the Smallcap index ended with a deep cut of 3.43 per cent.

The overall market capitalisation of BSE-listed firms was nearly ₹403 lakh crore at that time, compared to over ₹413 lakh crore in the previous session. This means investors lost more than ₹10 lakh crore in a single session.

Why did the stock market fall today?

Here are the key factors behind the sharp selloff in the Indian stock market today:

1. Trump's fresh tariff warnings

According to media reports, US President Donald Trump has signalled that he will announce fresh tariffs on pharmaceutical imports, reversing the relief rally in pharma shares. On April 2, Trump excluded tariffs on Indian pharmaceuticals.

According to a CNBC-TV18 report, Donald Trump said pharma tariffs are coming soon and will be at a level never seen before. The Trump administration is seeing pharma as a separate category.

2. Weak global cues

Weak global sentiment spilt over into the domestic market, as mounting concerns over a global economic slowdown—driven by Trump’s tariff policies, raised fears of a significant negative impact on the Indian economy as well.

Major Wall Street indices such as Nasdaq crashed 5.97 per cent and the S&P 500 plunged 4.84 per cent overnight. Among Asian peers, Japan's Nikkei fell over 3 per cent and Korea's Kospi declined nearly 2 per cent during the session.

The Indian stock market outperformed its Asian peers on Thursday, the day the US President announced sweeping new tariffs. However, it is facing renewed pressure today as weak global cues weigh on investor sentiment and trigger broad-based selling.

3. Concerns over tariff ramifications

Although experts believe Trump’s tariffs are unlikely to significantly impact the Indian economy directly, lingering uncertainty over the extent of their ripple effects is dampening market sentiment.

"Markets are going through heightened uncertainty, which is likely to last some time. Trump has triggered a trade war, and retaliatory tariffs from China, the EU, and others are on the cards. This will only extend the period of uncertainty and confusion in the market," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

“It appears that contraction in global trade and decline in global growth are inevitable in the present context. The decline in global growth will impact India’s growth, too, even though we might do better than other large economies,” said Vijayakumar.

4. Q4 earnings in focus

While investors are grappling with uncertainty over Trump tariffs, the focus is also on the upcoming quarterly results of India Inc.

IT major TCS will report its December quarter numbers next Thursday, April 10.

The numbers could come on a mixed note. Investors will keenly observe management commentary amid the evolving situation in the world in the wake of Trump's tariff policies.

Indian corporates have reported unimpressive numbers in the last three quarters, and there are expectations that Q4 numbers will be stable and even show some slight improvement. If this hope is dashed, it may trigger a fresh wave of selloff in the Indian stock market.

5. Inflation risk looms

Experts believe Trump's tariff policies will drive up inflation in the US, which could mean the US Federal Reserve will not cut rates this year.

"Morgan Stanley said on Thursday it expects the US Federal Reserve will not cut rates this year due to potential elevated inflation levels on the back of Trump's latest tariffs," reported Reuters.

Morgan Stanley had earlier expected a 25 basis point cut in June.

No Fed rate cuts would affect the Indian stock market in several ways, including foreign capital outflow and currency weakness.

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Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.