Why Has Sensex Crashed Today? Key Factors Behind Share Market’s Black Monday On April 7 – News18
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Why Is Stock Market Down Today? The BSE Sensex on Monday nosedived 2,226.79 points to close at 73,137.90, while the NSE Nifty slumped 742.85 points to settle at 22,161.60.
Both NSE Nifty and and BSE Sensex on Monday opened over 3.5 per cent down to hit 10-month lows on April 7.
Stock Market Crash Today: The domestic share market on Monday started the week with a massive sell-off, with the NSE Nifty and BSE Sensex ending the day lower by around 3 per cent to hit 10-month lows on April 7. The bloodbath in the domestic market comes even as global markets witnessed an even worse crash, with Hong Kong’s Hang Seng plummetting over 11 per cent shortly after the market opened, Tokyo’s Nikkei 225 index losing nearly 8%, Australia’s S&P/ASX 200 tumbling more than 6%, and South Korea’s Kospi down by 4.4%.
In the opening trade, the NSE Nifty and and BSE Sensex traded lower by over 3.5 per cent down.
The BSE Sensex on Monday nosedived 2,226.79 points to close at 73,137.90, while the NSE Nifty slumped 742.85 points to settle at 22,161.60.
In the opening trade, the Sensex crashed 3,939.68 points to 71,425.01, the NSE Nifty tumbled 1,160.8 points to 21,743.65.
Why Was Sensex Down Today?
Tariff War: The biggest reason for the decline in the stock market is the ongoing tariff war after US President Donald Trump’s imposition of ‘reciprocal tariffs’ across the world on all almost goods imports into the US. Following this, China has announced a retaliatory tariff of 34 per cent on the US, deepening the global trade war. It has triggered a massive sell of in the global equities.
“Globally markets are going through heightened volatility caused by extreme uncertainty. No one has a clue about how this turbulence caused by Trump tariffs will evolve,” V K Vijayakumar, chief investment strategist of Geojit Financial Services.
US Recession Fear: Following the tariff imposition, analysts expect the US to go into recession amid rising inflation and falling growth. Goldman Sachs has increased the US recession probability to 45% (up from 35%). It said if most of the April 9 tariffs do take effect, then “we expect to change our forecast to a recession.
All sectors were deep in the red, with Nifty Metal taking the steepest hit, tumbling over 6 percent. Nifty IT and Nifty Auto also suffered significant losses, declining in the range of 4 to 5 percent. Meanwhile, India VIX — the volatility index that gauges near-term market sentiment — spiked more than 55 per cent, climbing above the 21 mark and indicating heightened fear among investors.
The broader markets were not spared either, with both the midcap and smallcap indices shedding over 3 percent each.
What Analysts Say
On the Nifty, ICICI Securities in its note on Monday said, “Trade war concerns kept risk assets under pressure across the globe with India being no exception. Nifty as well midcap and small cap indices lost more than 2% last week amid ongoing uncertainty. Considering weak global markets and resurfaced selling pressure from FIIs, we should be avoid buying till Nifty is not moving above 22800 levels once again. From the support perspective, Feb lows near 22000 should provide immediate support to the indices.”
Vijayakumar said wait and watch would be the best strategy in this turbulent phase of the market. There are a few things that investors should keep in mind. One, the irrational Trump tariffs will not continue for long. Two, India is relatively better placed since India’s exports to the US as percentage of GDP is only around 2 percent and therefore the impact on India’s growth will not be significant. Three, India is negotiating a Bilateral Trade Agreement with the US and this is likely to be successful resulting in lower tariffs for India.
“Domestic consumption themes like financials, aviation, hotels, select autos, cement , defence and digital platform companies are likely to come out relatively unscathed from the ongoing crisis. Trump is unlikely to impose tariffs on pharmaceuticals since he is on the back foot now and, therefore, this segment is likely to show resilience,” he added.
Technical View
Rupak De, senior technical analyst at LKP Securities, said, “The index has fallen back into a descending channel on the daily timeframe as bearish sentiment rose amid escalating trade tensions between countries. Nifty slipped by more than 1,000 points at one point but recovered to close 418 points off the low. For the day, the index found support around the multiple support zones near 21,700.”
In the short term, the trend remains weak. On the higher side, resistance is placed at 22,350 and 22,550. On the lower side, support is seen at 21,900, below which the decline is likely to resume, he added.
Asian Markets
Japan’s share benchmark nosedived on Monday after the meltdown Friday on Wall Street over U.S. President Donald Trump’s tariff hikes. Tokyo’s Nikkei 225 index lost nearly 8% shortly after the market opened and Australia’s S&P/ASX 200 tumbled more than 6%.
South Korea’s Kospi lost 4.4%.
US futures signaled further weakness. The future for the S&P 500 lost 4.2% while that for the Dow Jones Industrial Average shed 3.5%. The future for the Nasdaq lost 5.3%.
On Friday, Wall Street’s worst crisis since COVID slammed into a higher gear. The S&P 500 plummeted 6% and the Dow plunged 5.5%. The Nasdaq composite dropped 5.8%.
