As the Nifty 50 slipped below 21,800 and midcaps tanked 10%, Monday’s market rout exposed India’s vulnerability to Trump’s tariff gamble. With no retreat in sight from the U.S., investors brace for more pain.
BY PC Bureau
Mumbai, April 7, 2025 –
“The Indian stock market suffered a dramatic collapse on Monday, mirroring a global selloff driven by rising fears of a trade war sparked by U.S. President Donald Trump’s aggressive tariff policies. The Sensex plummeted by as much as 4,000 points in early trading, while the Nifty 50 fell below the 21,800 mark. Later in the session, the market saw a mild recovery, with losses narrowing to 2,700 points on the Sensex and 900 points on the Nifty.”
The BSE Midcap and Smallcap indices also took a severe hit, plunging up to 10% as panic gripped investors.
The sharp decline mirrors turmoil in major markets worldwide, driven by Trump’s unwavering commitment to reciprocal tariffs imposed on over 180 countries. With no signs of retreat from the White House, analysts warn that the fallout could reshape global trade and economic stability.
Massive Crash!
Sensex tanks 3,900+ points (5.19%) — one of the biggest single-day drops in years.
Global tensions & FII sell-off trigger panic.
Markets deep in red.
Have you seen a fall like this before?#Sensex #MarketCrash #stockmarketcrash#Sensex pic.twitter.com/woGERMqkuC— Virender Singh (@Virende72717973) April 7, 2025
Five Key Drivers Behind the Market Bloodbath
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Global Market Meltdown
Stock markets across the globe are reeling, with Asia, Europe, and the U.S. witnessing steep declines. In Asia, Japan’s Nikkei plummeted 7%, and Taiwan’s Weighted Index crashed 10% on Monday. On Friday, Wall Street saw the S&P 500 drop 5.97%, the Dow Jones fall 5.50%, and the Nasdaq tumble 5.73%. Trump’s insistence that tariffs are “medicine” for trade imbalances—despite the carnage in equity markets—has amplified the gloom. “I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump told Reuters on Sunday, shrugging off concerns about the global stock rout. -
Tariff Uncertainty Unsettles Investors
The Trump administration’s rigid stance on its sweeping tariff regime has dashed hopes of quick resolutions through negotiations. Indian markets, while somewhat insulated, are bracing for indirect shocks. Brokerage firm Emkay Global cautioned, “We see further downside for Indian equities in Q1FY26. The U.S. recession risk could slash FY26 Nifty EPS by nearly 3%, potentially dragging the Nifty to 21,500.” -
Looming Economic Slowdown
Experts fear Trump’s tariffs will stoke inflation, erode corporate profits, dampen consumer confidence, and stall global growth. For India, heavily reliant on exports to the U.S., the ripple effects could be profound, even if direct tariff impacts remain moderate compared to nations like China or Vietnam.
Nifty IT crashes 7% as Trump doubles down on tariffs.
Infosys, Coforge lead the plunge — down 10% each!#NiftyIT #Infosys #Coforge #StockMarket #Trump #Tariffs #ITStocks #TechCrash #DalalStreet #MarketUpdate #Sensex #Nifty50 #Investing #Trading pic.twitter.com/Ie9EuWejRL
— Moneycontrol (@moneycontrolcom) April 7, 2025
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Relentless Foreign and Domestic Selling
Both foreign institutional investors (FIIs) and domestic players offloaded stocks heavily in cash markets on Friday, a trend that intensified Monday. The sustained exodus of capital has deepened the market’s wounds, with no immediate respite in sight. -
Fragile Sentiment Amid Recession Fears
The combination of tariff-induced uncertainty and a potential U.S. recession has rattled investor nerves. With global crude oil prices dipping below $60 per barrel and Wall Street futures signaling further losses—Dow futures dropped 1,200 points—India’s markets are caught in a vortex of fear and volatility.
MUST READ: India Stays Silent as Trump’s Tariff War Sparks Global Retaliation
A Grim Outlook
Monday’s crash wiped out billions in investor wealth, with the Sensex and Nifty recording one of their worst single-day falls in recent memory. As Trump doubles down on his tariff agenda, calling it a cure for trade imbalances with nations like China and the EU, the global economic order hangs in the balance. For India, the question remains: will its cautious diplomacy shield it from the storm, or will it too succumb to the trade war’s far-reaching consequences?
