Stock Market Today: Sensex and Nifty Drop Amid US Tariff Uncertainty

Market Performance

On March 26, 2025, equity benchmark indices Sensex and Nifty declined over 1% after a seven-session rally. This downturn was attributed to investor profit booking and uncertainties surrounding US tariff policies.

The Sensex opened positively, reaching an intraday high of 78,167.87 with a gain of 150.68 points. However, selling pressure in heavyweight stocks led the index to fall by 822.97 points or 1.05%, closing at 77,194.22.

Similarly, the NSE Nifty slipped below the critical 23,500 level. After rising 67.85 points to 23,736.50 in early trade, it dropped to a low of 23,451.70, down 216.95 points or 0.91%.

Tech Mahindra, NTPC, Cipla, Axis Bank, and Dr Reddy's Laboratories were key laggards contributing to the decline.

Factors Behind the Market Decline

1. US Tariff Concerns

US trade policy uncertainty was a significant factor in the market decline. US President Donald Trump has indicated plans to announce considerable tariff measures on April 2, referred to as "Liberation Day", against countries he perceives as engaging in unfair trade practices. This lack of clarity has caused concerns in global markets, including India.

2. Profit Booking

Following a sharp market rally over the past week, investors engaged in profit booking, leading to a pullback. This selling pressure was mainly observed in sectors with significant exposure to the US market.

3. Rupee Depreciation

The Indian rupee weakened by six paise, reaching 85.78 against the US dollar in early trade. Factors contributing to this depreciation included weak domestic equities, a strengthening US dollar, and month-end dollar demand from importers. This followed a seven-session winning streak for the rupee, ending with an 11-paise decline the previous day.

4. Rising Crude Oil Prices

Crude oil prices increased due to concerns over supply constraints following the US President's statements on imposing tariffs against countries importing oil and gas from Venezuela. Rising oil prices significantly impact Indian markets, as the country is a net importer of the crude oil. Additionally, US sanctions on Iran and expectations of reduced US crude inventories further supported the upward trend in oil prices.

Summary

The Sensex and Nifty experienced significant declines on March 26, 2025, breaking their seven-day winning streak. Investor profit booking, concerns about upcoming US tariff announcements, a weakening rupee, and rising crude oil prices drove this downturn. The technical outlook suggests further declines if support levels are breached, while resistance levels may offer a potential rebound point. Markets remain cautious amid ongoing global uncertainties and domestic economic pressures.