Nifty 50
On April 7, 2025, the Nifty 50 index experienced a significant decline, closing at 21,986.15, down 918.30 points or 4.01% from the previous trading session. This sharp drop was primarily triggered by the implementation of extensive import tariffs by U.S. President Donald Trump, which intensified global trade tensions and heightened fears of a potential recession.
NIFTY 50 Sectoral Impact
All major sectors within the Nifty 50 faced substantial losses:
NIFTY 50 Information Technology (IT):
The Nifty IT index tumbled 7%, with major IT firms like Infosys and Coforge experiencing declines of up to 10%. This sector was particularly affected due to its significant exposure to U.S. markets and concerns over the impact of tariffs on service exports.
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NIFTY 50 Metals and Financials:
These sectors also saw significant downturns, contributing to the overall decline of the Nifty 50.
Market Opening and Intraday Performance
The Nifty 50 opened the day with a steep decline, plunging nearly 5% in the pre-open session to 21,586.35. Throughout the trading day, the index remained under pressure, reflecting widespread investor concern over the escalating trade war and its potential impact on the global economy.
Volatility and Investor Sentiment
The India VIX, a measure of market volatility, surged by over 50%, indicating heightened investor anxiety. This spike reflects the uncertainty and fear prevailing in the market due to the escalating trade tensions and potential economic repercussions.
Broader Market Implications
The broader Indian equity markets mirrored this negative trend:
BSE Sensex:
Plunged over 3,900 points in the pre-open session, reflecting widespread investor concern.
This market turmoil was not isolated to India; global markets also faced severe downturns. Japan’s Nikkei 225 dropped nearly 8%, and Hong Kong’s Hang Seng fell by 9.4%, as investors reacted to the escalating trade tensions and the potential for a global economic slowdown.
Market View
The broader Indian market mirrored this downturn, with the BSE Sensex falling 3.86% to close at 72,455.5. This marked the steepest intraday losses for both indices since March 2020.
The volatility index surged by 57%, indicating elevated investor anxiety. All 13 major sectors in the Indian market faced declines, with information technology, metals, and financials among the hardest hit.
US Tariff effect
The ripple effects of the U.S. tariffs were felt across Asian markets. Japan’s Nikkei 225 dropped nearly 8%, Hong Kong’s Hang Seng plunged 9.4%, and indices in Shanghai and Seoul also recorded significant losses.
In response to the market turmoil, President Trump defended the tariffs, likening them to “medicine” necessary to correct trade imbalances. Despite international backlash and concerns over a global recession, he remained steadfast in his approach.
Analysts View
Analysts have expressed concerns about the potential impact on India’s economic growth, suggesting that the ongoing trade tensions could exert downward pressure on the country’s GDP. The market’s recovery is anticipated to hinge on developments in trade policies and shifts in investor sentiment.
The situation remains fluid, with global markets closely monitoring policy responses and negotiations aimed at mitigating the escalating trade conflict.
Read more about US Tariff’s here.