Market Meltdown: Sensex, Nifty Plunge 3% Amid Global Trade War Fears

Market Performance

On April 7, Indian stock markets saw significant losses, with benchmark indices Sensex and Nifty 50 declining sharply by around 3 per cent. The Sensex dropped by 2,226.79 points, or 2.95 per cent, to close at 73,137.90. Meanwhile, the Nifty 50 ended the session by 742.85 points, or 3.24 per cent, at 22,161.60.

Market volatility spiked as the India VIX, an indicator of fear and uncertainty, surged by 66 per cent to reach 22.85. This marked its steepest intraday rise since June 2024. The broader market sentiment was negative, with 559 shares advancing, 3,372 shares declining, and 137 remaining unchanged.

Global Context and Market Sentiment

The sharp selloff was sparked by rising global trade tensions. U.S. President Donald Trump's move to impose retaliatory tariffs has fueled concerns about the possibility of a full-scale trade war.

Several nations, including China, Canada, and members of the European Union, have signalled potential countermeasures. These developments have increased anxiety about a possible global recession and weakened investor confidence.

Sectoral and Broader Market Impact

Nifty Metal suffered the steepest loss among sectoral indices, plunging 7%. Companies such as Tata Steel, JSW Steel, and Hindalco were among the significant drags on the index. Other key sectors, including real estate, auto, bank, infrastructure, IT, oil and gas, and pharma, declined by 3 to 4 per cent.

The midcap and Smallcap indices also faced sharp corrections, each falling by around 4 per cent. This reflects the vulnerability of broader markets to economic slowdowns due to their limited geographic and product diversification.

Company Developments

Tata Motors experienced a drop of over 8 per cent following an announcement from its subsidiary, Jaguar Land Rover Ltd. The company said it would pause shipments to the United States for April. This decision is a response to the newly imposed U.S. tariffs on imported automobiles and auto parts.

Siemens India also witnessed significant movement, with its shares falling by over 50 per cent during intraday trading. The stock turned ex-demerger on April 7, opening at Rs 2,450 compared to its previous close of Rs 4,928.15. The demerger was executed in a 1:1 ratio, entitling shareholders to one share of Siemens Energy India for every share held in Siemens India. The record date for the corporate action was April 4.

Summary

April 7 marked a turbulent session for Indian equity markets, driven by rising global trade tensions and economic slowdown concerns. With nearly all sectors closing in the red, the market reacted strongly to geopolitical uncertainty. The sharp volatility spike and broad-based declines reflected investor unease as fears of a global recession intensified. Amidst the downturn, Hindustan Unilever was the only notable gainer on the Nifty 50, while stocks like Trent, Tata Steel, JSW Steel, Hindalco, and Shriram Finance were among the top laggards.