Market Sell-Off Deepens as Trade War Fears Intensify
Indian stock markets experienced a significant downturn on Friday, April 4th, extending their losing streak for a second consecutive day. Both the Sensex and Nifty 50 indices fell sharply, by over one percent each, as investor sentiment soured globally due to rising fears of a trade war following recent US tariff announcements.
Steep Declines and Wealth Erosion
The selling pressure intensified throughout the session, pushing the benchmarks considerably lower by the closing bell. The BSE Sensex concluded the day down 930.67 points, a significant drop of 1.22%, settling at 75,364.69. The NSE Nifty 50 experienced an even steeper percentage decline, falling 345.65 points or 1.49%, to close below the psychological 23,000 mark at 22,904.45.
Market breadth was overwhelmingly negative, with approximately 2,721 shares declining versus only 1,081 advancing, reflecting the widespread risk-off mood. The sharp decline resulted in a massive erosion of investor wealth, estimated at over ₹11 lakh crore, as market participants reduced their equity exposure amidst the growing uncertainty. Among the hardest hit on the Nifty 50 index were ONGC, Hindalco, and Cipla, each registering declines of over six percent.
Broad-Based Sectoral Weakness
The negative sentiment permeated all sectors of the market, with every major sectoral index closing significantly lower. The Nifty Auto, Pharma, IT, and Metal indices were among the most severely impacted, bearing the brunt of the sell-off. The broader market segments also faced intense pressure, with the Nifty Midcap 100 and Nifty Smallcap 100 indices plummeting by up to three percent during the afternoon session.
Specific Sector Concerns driving the fall:
- Metals: The metals index dropped sharply due to concerns that major producers like China, Vietnam, and South Korea might increase steel dumping at low costs, potentially hurting the sales volumes and profit margins of domestic Indian players. The broader anxiety about an escalating global trade war further dampened sentiment in this cyclically sensitive sector.
- Pharmaceuticals: Pharma stocks witnessed a sharp sell-off directly linked to comments from U.S. President Donald Trump indicating that his administration was considering potential tariffs specifically targeting pharmaceutical imports.
- Information Technology (IT): The IT index saw continued selling pressure, affecting both large-cap names like TCS and Infosys and mid-cap players. President Trump's "reciprocal tariffs" approach sparked concerns about a potential slowdown in client spending and overall US consumption, which is a critical market for Indian IT services.
Friday marked a day of intense selling on Dalal Street, driven primarily by escalating fears of a global trade war triggered by US tariff actions and rhetoric. The broad-based nature of the decline across all sectors, coupled with the significant erosion of investor wealth, the deep concern gripping the market. Investors appear to be bracing for further volatility as the implications of these trade tensions continue to unfold.
