Market Wrap: D-Street ends lower after Trump's tariff hit; Sensex sheds 322 pts, Nifty below 23,300

Indian benchmark indices closed lower on Thursday after the U.S. imposed 26% reciprocal tariffs, though losses were tempered by a surge in pharma stocks exempted from the duties and a relatively lower tariff rate compared to other Asian peers.

The benchmark BSE Sensex declined 322.08 points or 0.42% to close at 76,295.36, while the broader Nifty 50 index closed at 23,250.10, lower by 82.25 points or 0.35%.

The market capitalization of all listed companies on the BSE decreased by Rs 44,169 crore to Rs 413.33 lakh crore.

Sectoral Watch

After U.S. President Donald Trump announced reciprocal tariffs on about 60 countries, including India, shares of information technology (IT) companies, which generate a significant portion of their revenue in U.S. dollars, came under heavy selling pressure. Infosys, Tech Mahindra, and TCS plunged as much as 9%, dragging the Nifty IT index down 4.2%, with all its constituents closing in the red.

In contrast, the pharma sector provided a silver lining, as the index rose 2.3% after Trump exempted pharmaceutical products from the list of imports subject to reciprocal tariffs.

The auto sector also faced selling pressure, declining 1.1%, with Tata Motors and Bharat Forge leading the losses, falling 2.4% and 3.3%, respectively.

Meanwhile, the broader market showed some resilience, with the Nifty Midcap 100 and Nifty Smallcap 100 inching up 0.2% and 0.6%, respectively.

The broad-based tariffs, including a 26% duty on Indian imports, have fueled concerns over a prolonged slowdown in the U.S. economy—an event that could ripple through emerging markets, including India.

While Trump stated that Indian goods would face a 26% tariff, the White House executive order and India’s trade ministry both placed the rate at 27%. A baseline 10% tariff will take effect on Saturday, with the full reciprocal tariffs set to be implemented from April 9.

Expert View

The domestic market initially showed signs of recovery but ended with modest losses after the announcement of a relatively lower 26% tariff on U.S. imports, said Vinod Nair, Head of Research at Geojit Investments, adding that the IT and auto sectors experienced selling pressure due to US slowdown concerns and disruptions in the supply chain.

“Conversely, pharmaceutical stocks benefited from being exempt from the tariffs. Nonetheless, robust domestic macroeconomic data and lower crude oil prices aided the broader market performance. Although the tariff presents short-term challenges, India's economic resilience and bilateral trade agreement may help mitigate the overall impact," said Nair.

“From a technical perspective, traders should closely monitor the 20-day exponential moving average (DEMA) at 23,100. A break below this level could intensify selling pressure, potentially dragging the index toward 22,800. Conversely, holding above this level would likely sustain the range-bound movement. Amidst this consolidation, selective pockets across sectors are showing strength. Until a clear directional move emerges, the focus should remain on stock-specific opportunities," said Ajit Mishra , SVP, Research at Religare Broking.

Global Markets

Global stock markets tumbled on Thursday as investors fled to the relative safety of bonds, gold, and the yen, rattled by President Donald Trump’s sweeping U.S. trade tariffs that fueled fears of a global recession.

A new baseline 10% tariff on imported goods, along with steep "reciprocal" tariffs targeting countries Trump accused of imposing high trade barriers on the U.S., sent shockwaves through markets.

Tokyo's benchmark index slumped 2.7% overnight, putting it on track for its worst week in nearly two years. Wall Street futures fell 3%, while the dollar dropped more than 1% to a six-month low.

China was hit with a 34% tariff, while Japan, South Korea, and Vietnam faced levies of 24%, 25%, and 46%, respectively. Vietnamese stocks plunged 6.7% in response, while Australian shares and the Aussie dollar also fell as the country faced tariffs as well.

In China, hopes of government support and the strength of its domestic economy helped limit losses, with Hong Kong stocks falling around 1.5% and Shanghai slipping just 0.5%.

Gold surged to a record high above $3,160 an ounce before pulling back, as foreign exchange traders sought safety beyond the U.S. dollar.

Currency Watch

The rupee edged higher on Thursday, supported by a weaker dollar and steady inflows, as markets assessed the impact of sweeping U.S. reciprocal tariffs on global trade and growth. The local currency closed at 85.43 against the U.S. dollar, up from 85.4975 in the previous session.

Meanwhile, the dollar index, which measures the greenback's strength against a basket of six major currencies, fell 1.65% to 102.09.

Crude Impact

Oil prices tumbled more than 3% on Thursday after U.S. President Donald Trump announced sweeping new tariffs, raising investor concerns about a global trade war that could slow economic growth and dampen fuel demand.

By 09:18 GMT, Brent crude had dropped $2.66, or 3.55%, to $72.29 per barrel.

FII/DII Tracker

Foreign Institutional Investors (FIIs) continued their selling spree for the third straight session on April 2, offloading equities worth Rs 1,538 crore. Meanwhile, Domestic Institutional Investors (DIIs) remained net buyers for the fourth consecutive day, picking up equities worth Rs 2,800 crore.