Ahead of former US President Donald Trump’s tariff deadline, investors were on edge, as the benchmark indices Nifty and Sensex continued to decline on April 1. The sell-off was led by Nifty IT and Pharma, which are the stocks most vulnerable to any trade shocks, and then banking stocks. Fear swept the Street as the India VIX, a crucial indicator of market volatility, rose 8% to veer close to 14 levels.
The Sensex closed at 76,024.51, down 1,390.41 points, or 1.80%, while the Nifty was down 353.65 points, or 1.50 percent, at 23,165.70. Of the shares, about 140 remained constant, 1217 fell, and 2668 rose.
Trump’s tariffs may increase inflationary pressure and make it harder for the US Federal Reserve to lower interest rates, according to market analysts. His most recent action, a 25% tariff on foreign automobiles and auto parts, has investors anticipating more extensive trade restrictions. When risk aversion set in, gold, the ultimate safe-haven asset, reached new all-time highs at $3,161 and soared over $3,125 per ounce.
There was widespread slaughter back home. Significantly dependent on U.S. markets, the Nifty IT and Pharma indices saw declines of 2.5 and 1.8 percent, respectively.
Nifty Auto fell 0.5 percent as automakers released their March sales figures, while FMCG, Metals, and Infra all saw declines of roughly a percent.
Following suit, the Nifty Midcap 100 and Smallcap 100 fell 0.8 and 0.5 percent, respectively, as did the rest of the market. Despite a 10–14% rally in these indices this year, economists caution that valuations are still a worry and that further suffering may be ahead.
