Indian markets plunge as global recession fears mount; investor wealth erodes by ₹9 lakh crore amid fresh Trump tariff threats and global sell-off.
April 4, 2025: India’s stock markets witnessed a sharp sell-off on Friday, April 4, as fears of a US-led global trade war resurfaced. The Sensex tanked 931 points to close at 75,364.69, while the Nifty 50 slid 346 points, ending the day at 22,904.45 — falling below the key 23,000-mark.
Also Read: Indian IT Stocks Tumble as US Recession Fears Mount; Is the Worst Yet to Come?
The broader market bled even more, with the BSE Midcap index plunging 3.08% and the Smallcap index crashing by 3.43%. The total market capitalisation of BSE-listed firms fell by ₹9 lakh crore in a single day, from ₹413 lakh crore to ₹404 lakh crore.
Also Read: Dollar Plunges to Six-Month Low as Global Markets Reel from Trump’s Tariff Shock
🔍 Why Did the Markets Crash?
Here are the five key factors behind Friday’s market bloodbath:
1️⃣ Fresh Trump Tariff Threats
US President Donald Trump hinted at unprecedented tariffs on pharmaceutical imports, reversing a brief relief rally in Indian pharma stocks. Although India was initially spared from tariff impacts, Trump’s statement — that pharma tariffs “are coming soon” — jolted investor confidence.
Nifty Pharma dropped 6% in response to the announcement.
2️⃣ Weak Global Cues
Global markets were already on edge after the US tariffs announcement. Wall Street indices saw sharp declines:
- Nasdaq: down 5.97%
- S&P 500: down 4.84%
Asian markets followed suit:
- Nikkei: down 3%
- Kospi: down nearly 2%
India, which remained relatively stable on Thursday, couldn’t withstand the broader global pressure today.
3️⃣ Ripple Effect of Trade War Uncertainty
Experts believe the economic fallout from Trump’s aggressive trade stance may have global implications, with the EU and China expected to retaliate, leading to slowdown in global trade and GDP.
4️⃣ Caution Ahead of Q4 Earnings
Investors are also bracing for Q4 FY25 earnings, with TCS set to report its numbers on April 10. After three weak quarters, expectations are high for a recovery. Any negative surprises may deepen the ongoing correction.
5️⃣ Inflation & US Fed Rate Cut Uncertainty
Trump’s tariffs could fuel US inflation, making it unlikely for the Federal Reserve to cut rates this year. According to Morgan Stanley, the Fed is now unlikely to reduce interest rates in 2025, reversing its earlier forecast.
This puts emerging markets like India under pressure, as foreign capital outflows and rupee volatility could rise in the absence of rate relief.
📉 Outlook
With macroeconomic uncertainty at its peak and investor nerves fraying, analysts are urging caution.
“It’s not just about Trump or tariffs. The global order is shifting, and markets don’t like surprises. We may be in for a prolonged phase of volatility,” said a market strategist.
As geopolitical tensions, trade risks, and economic fears collide, investors are watching global cues — and Q4 earnings — with a cautious eye.
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