Sensex crashes 1,400 points: Trump tariffs among 5 key factors that dragged Indian stock market today

Stock market crash today: The Indian stock market suffered strong losses on Tuesday, April 1, amid heightened uncertainty over the US administration's impending reciprocal tariffs.

The Sensex opened at 76,882.58 against its previous close of 77,414.92 and crashed 1,503 points to the level of 75,912.18 during the session.

Finally, the 30-share index closed with a loss of 1,390 points, or 1.80 per cent, at 76,024.51. The Nifty 50 ended 354 points, or 1.50 per cent, down at 23,165.70.

The BSE Midcap index settled with losses of 1.04 per cent, while the Smallcap index ended 0.07 per cent up.

Investors lost about ₹3 lakh crore in a single session as the overall market capitalisation of firms listed on the BSE dropped to nearly ₹410 lakh crore from nearly ₹413 lakh crore in the previous session.

Among the sectoral indices, Nifty Bank dropped 1.4 per cent, while the Realty, IT, Consumer Durables and Financial Services crashed 2-3 per cent.

5 key factors that weigh on Indian stock market sentiment

1. Uncertainty over ‘Liberation Day’ tariff plan

Investors appear nervous about the US President Donald Trump's upcoming tariff rollout plan in April. According to Bloomberg, Treasury Secretary Scott Bessent told Fox News that Trump would announce his reciprocal tariff plan on Wednesday during an event in the White House Rose Garden at 3 PM in Washington.

The president has called his April 2 announcement “Liberation Day,” marking the start of a stricter trade policy aimed at punishing trade partner countries he believes have taken advantage of the US.

Trump has indicated that his tariff plans have been decided and will include all countries.

Experts say tariff risks may weigh on market sentiment, but India may not be significantly impacted as it is open to cutting tariffs on more than half of US imports.

"Trade war remains as the area of concern on the external economic front. However, according to media reports, India is open to cutting tariffs on more than half of US imports worth $23 billion in the first phase of a trade deal," said G Chokkalingam, Founder & Head of Research at Equinomics Research Private Limited.

Meanwhile, the four-day negotiations of senior officers from India and the US ended on Saturday, March 29. India and the US have decided to hold sectoral talks under the proposed bilateral trade agreement (BTA) in the coming weeks.

2. Focus shifts to RBI's MPC

The Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) will meet on April 7-9 to decide the policy stance and interest rates amid the volatile global environment.

The RBI MPC will likely announce a 25 bps rate cut on April 9. However, market participants are eager to gauge the central bank’s outlook on the country's evolving growth and inflation trends.

Bank of America (BofA) Global Research expects the RBI to cut the repo rate by 25 basis points (bp), bringing it down to 6 per cent. BofA said the path for further easing seems clear, with headline inflation likely to remain below 4 per cent over the next few months and exchange rate pressures easing substantially.

3. Caution ahead of Q4 earnings

The next big trigger for the market is the December quarter (Q4FY25) earnings of Indian corporates. After three disappointing quarters, there are expectations of some improvement in Q4 numbers. If Q4 numbers come weaker than expected, it may derail the market recovery seen in March.

Experts believe a significant revival could any be expected from Q1 or Q2 of the financial year 2025-2026.

"The street expects Nifty earnings to grow between 12-15 per cent each in FY26 and FY27," said Dhiraj Relli, MD & CEO of HDFC Securities.

4. Lack of fresh triggers

The Indian stock market witnessed a solid 6 per cent gain in March. However, this gain has discounted most positives, including the expectations of rate cuts, better earnings and favourable growth-inflation dynamics.

At present, the market lacks fresh triggers to move upwards. Trump's tariffs, earnings and macro prints will be the key factors that will decide the course of the domestic market in the near future.

5. Technical factors

According to Anand James, Chief Market Strategist, Geojit Investments, the Nifty requires an outright rise above 23,700-23,750 to revive strength. Else, it may move sideways with downside bias aiming 23,300.

"Breakouts beyond the 23,750-23,300 bands may be expected to trigger directional trades of at least 250 points," said James.

"Volatility is expected due to the US tariff announcement on April 2. If selling pressure intensifies, the Nifty 50 may dip toward 23,400–23,200, offering a buying opportunity. The 23,000 level remains a key support, while resistance lies at 23,850, with a potential move toward 24,100–24,200," Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers.

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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.