Stock market crash today: It's a bloodbath! BSE Sensex plunges over 3,200 points, Nifty50 below 21,900 - top 5 reasons markets in free fall

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Stock market crash today: It’s bloodbath on Monday! BSE Sensex and Nifty50, the Indian equity benchmark indices, crashed in trade on Monday. Both stock market indices plunged over 4%. Why is the stock market falling? We take a look at key reasons:

Stock market crash today: It’s bloodbath on Monday! BSE Sensex and Nifty50, the Indian equity benchmark indices, crashed in trade on Monday. Both stock market indices plunged over 4%. At 12:29 PM, BSE Sensex was trading at 72,142.89, down 3,222 points or 4.27%. Nifty50 was at 21,863.80, down 1,041 points or 4.54%.

The top BSE Sensex losers were Tata Steel (-9.32%), Tata Motors (-8.29%), L&T (-6.23%), HCL Tech (-5.72%) and Infosys (-4.8%). All thirteen sectors experienced declines. Technology firms, with substantial revenue exposure to the United States, declined by 7%. The wider market segments comprising smaller and medium-sized enterprises registered falls of 6.2% and 4.6%, respectively.

Key market indices declined significantly, with Nifty Metal recording an 8% decrease whilst Nifty IT saw a reduction exceeding 7%. Nifty Auto, Realty, and Oil & Gas sectors each witnessed declines surpassing 5%. The broader market impact was substantial, as small-cap and mid-cap indices registered falls of 10% and 7.3%, respectively.

The combined market capitalisation of companies listed on the BSE saw a reduction of Rs 19.4 lakh crore, bringing the total value to Rs 383.95 lakh crore.

According to Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services, “Globally markets are going through heightened volatility caused by extreme uncertainty. No one has a clue about how this turbulence caused by Trump tariffs will evolve. Wait and watch would be the best strategy in this turbulent phase of the market.”

Vijayakumar says there are a few things that investors should keep in mind. “One, the irrational Trump tariffs will not continue for long. Two, India is relatively better placed since India’s exports to the US as percentage of GDP is only around 2 percent and therefore the impact on India’s growth will not be significant. Three, India is negotiating a Bilateral Trade Agreement with the US and this is likely to be successful resulting in lower tariffs for India.”

“Domestic consumption themes like financials, aviation, hotels, select autos, cement , defence and digital platform companies are likely to come out relatively unscathed from the ongoing crisis. Trump is unlikely to impose tariffs on pharmaceuticals since he is on the back foot now and, therefore, this segment is likely to show resilience,” he added.

The week ahead has crucial domestic and global events, with international investors monitoring trade-related developments closely. On the domestic front, the MPC meeting conclusion on April 9 will be pivotal, followed by important economic indicators—IIP and CPI data—scheduled for April 11. The quarterly earnings season commences with TCS presenting its results on April 10.

1. US market Nasdaq Now In Bear Territory

The Nasdaq index moved into bear market territory on Friday, declining over 20% from its latest high point. This followed the extensive tariff announcement by U.S. President Donald Trump, raising concerns about worldwide economic deceleration. The comprehensive nature of these tariffs caught market participants off guard, leading to substantial declines across international financial markets.

The Federal Reserve Chairman Jerome Powell noted that the tariffs exceeded anticipated levels and cautioned about their potential effects on inflation and economic expansion, contributing to the unclear prospects for the U.S. economy.

2. Global market crash

The Indian stock markets reflected the broader international decline, with significant drops across Asian exchanges. The Japanese Nikkei recorded a 7% fall, whilst South Korea’s Kospi declined by 5%, and the Chinese blue-chip index decreased by nearly 7%. Hong Kong’s Hang Seng experienced a substantial reduction of over 10.5%.

Concurrently, American futures showed continued weakness, with Nasdaq futures declining 4% and S&P 500 futures showing a 3.1% reduction. The European futures markets also displayed significant negative movement.

3. US Recession Fears

Investors are increasingly worried about an economic downturn rather than immediate inflation challenges. The upcoming U.S. consumer price index (CPI) report is projected to show a 0.3% rise for March. However, experts anticipate that impending tariffs will lead to substantial cost increases across various industries, affecting everything from food items to vehicles.

As the earnings season commences, businesses are likely to face pressure on their profit margins due to higher operational expenses. Approximately 87% of U.S. firms will disclose their financial results between April 11 and May 9, with financial institutions leading the announcements.

4. Global Commodity Prices Plunge

The worldwide commodities market experienced substantial losses due to concerns about reduced demand and potential economic contraction.

The price of Brent crude decreased by 6.5%, while WTI saw a 7.4% reduction. Precious metals weren’t spared, with gold declining 2.4% and silver dropping 7.3%. Industrial metals also experienced significant reductions, as copper fell 6.5%, zinc decreased 2%, and aluminium declined 3.2%, reflecting investors’ unease about trade disputes and recession possibilities.

5. Safe Havens in Focus

Market participants shifted towards secure investments as concerns about a worldwide economic downturn intensified, creating additional pressure on stock markets. Strong demand for government securities pushed the 10-year U.S. Treasury yield down by 8 basis points to 3.916%. Trading in Fed funds futures increased, indicating expectations of an additional 25-basis-point reduction in rates by the U.S. Federal Reserve within the year.

The widespread move towards secure assets resulted in extensive selling across equity markets, as cautious sentiment spread throughout global trading venues. Although Fed Chair Jerome Powell indicated on Friday that the central bank remains patient regarding policy changes, market projections now suggest a 56% likelihood of a rate reduction by May.

6. Trade War Escalation

The global trade dispute intensified as China implemented retaliatory tariffs on various U.S. products, responding to comprehensive U.S. tariff increases earlier in the week. This ongoing exchange of trade restrictions has generated significant concerns regarding international trade and economic development.

Market analysts have expressed apprehension that sustained trade disagreements between the United States and China could affect manufacturing processes, reduce company profits, and further impact global demand, leading to substantial declines in worldwide equity markets.

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TOI Business Desk

The TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.Read More

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