World
India
Global stock markets suffered a historic rout on Monday as U.S. President Donald Trump showed no signs of retreating from his aggressive tariff stance, intensifying fears of a looming recession. Investors quickly adjusted their expectations, pricing in multiple interest rate cuts from the Federal Reserve this year.
The reaction was swift—futures markets factored in nearly five quarter-point cuts in U.S. rates for 2025, sending Treasury yields tumbling and weakening the dollar as investors sought refuge in safer assets.
Trump’s Stance: No Deal Until Trade Deficit is Fixed
Despite the stock market bloodbath, Trump remained unmoved. Speaking to reporters, he dismissed concerns over market losses and reiterated that he would not engage in negotiations with China until the U.S. trade deficit was fully addressed.
Market analysts had expected the steep losses to force Trump to reconsider his tariff policies. However, his continued defiance rattled investors further.
“The size and disruptive impact of U.S. trade policies, if sustained, would be sufficient to tip a still-healthy U.S. and global expansion into recession,” Reuters quoted Bruce Kasman, Head of Economics at JPMorgan. The firm has now raised the probability of a recession to 60%.
Wall Street’s Brutal Selloff
U.S. markets faced a severe downturn:
- S&P 500 futures fell nearly 5% in volatile trading.
- Nasdaq futures dropped 5.7%, adding to last week’s $6 trillion in market losses.
- The Dow Jones Industrial Average saw its worst drop in years.
European Markets Plunge
The turmoil quickly spread to European markets, where major indexes recorded their worst session since March 2020:
- The STOXX 600 fell 5.3%.
- Germany’s DAX plunged 9.4%, its sharpest decline in recent history.
- The European banks index dropped 4.8%, pushing it 20% below its recent high.
Investors dumped stocks across sectors, with defense stocks taking a severe hit—Rheinmetall saw a 21% drop, while the broader defense index plummeted 11.5%.
Asia-Pacific Markets in Freefall
Asian markets bore the brunt of the global selloff, witnessing some of the steepest declines since the 2008 financial crisis:
- Hong Kong’s Hang Seng Index dropped 12%, the largest single-day fall since 2008.
- Mainland China’s CSI 300 declined by more than 7% before stabilizing as China’s sovereign fund, Central Huijin, stepped in to buy shares.
- Japan’s Nikkei slid 7.8% to its lowest level since late 2023.
- South Korea’s Kospi fell 5%, while MSCI’s Asia-Pacific index recorded a 7.8% decline.
- India’s Nifty 50 and Sensex plunged 4%, with investors losing nearly ₹19 lakh crore in a single day.
Indian Stock Market: Sensex Crashes 4,000 Points
The Indian stock market experienced a sharp selloff on Monday, April 7, in line with major global markets, as concerns over a potential global trade war escalated following US President Donald Trump’s reciprocal tariffs.
The Sensex plunged nearly 4,000 points in early trade, while the Nifty 50 slipped below 21,750. The BSE Midcap and Smallcap indices tumbled as much as 10 percent.
Market volatility spiked, with the India VIX surging 52 percent to nearly 21, signaling heightened investor anxiety.
By 3 PM, the Sensex had dropped 2,611 points, or 3.47 percent, to 72,753, while the Nifty 50 was down 854 points, or 3.73 percent, at 22,050.
Investor wealth eroded rapidly, with the total market capitalization of BSE-listed firms shrinking by nearly ₹19 lakh crore to ₹384 lakh crore from over ₹403 lakh crore in the previous session.
More than 700 stocks hit their 52-week lows during intraday trade on the BSE.
Why Are Indian Markets Crashing?
Experts attribute the market crash to five key factors:
- Global Selloff
Trump’s unwavering tariff policies sparked a global selloff. The S&P 500 lost nearly 6% on Friday, while Dow Jones fell 5.5% and the Nasdaq dropped 5.73%.
- Tariff Impact Not Fully Priced In
The magnitude of Trump’s tariff policies has unsettled investors, with markets failing to anticipate their full impact. Indian brokerage firm Emkay Global warned that the first quarter of the financial year could see further downside.
- Fears of a Global Slowdown
Higher tariffs are expected to fuel inflation, erode corporate profitability, and drag down economic growth. JPMorgan raised its global recession probability from 40% to 60% following the tariff announcement. Goldman Sachs lowered India’s GDP growth forecast from 6.3% to 6.1% after Trump’s new 26% tariff on Indian goods.
- Foreign Portfolio Investors (FPI) Outflows
Foreign investors, who had been net buyers in March, resumed selling Indian equities in April. In just a few trading sessions, FPIs pulled out ₹13,730 crore from Indian markets.
- RBI and Q4 Earnings in Focus
Investors are now looking to the Reserve Bank of India’s (RBI) policy decision on April 9 for possible rate cuts. Q4 earnings season begins this week, with TCS set to announce results on April 10. Analysts are keenly watching management commentary on the economic impact of the trade war.
Investor Sentiment: What Experts Say
Despite the selloff, some analysts see opportunities amid the chaos. “History suggests that these types of tariff shocks create buying opportunities in the long run, especially for emerging markets,” noted Rakesh Kapoor, Chief Strategist at Global Investments Ltd according to Mint.
Others, however, remain cautious. “We’re in uncharted territory here. If Trump continues to escalate tariffs, we could see a full-blown trade war with devastating consequences for global growth,” warned Sarah Levine, Senior Economist at BlueChip Advisory.
For now, investors are bracing for more volatility as the tariff war shows no signs of abating.
Also Read: Indian Stocks Brace For Major Fall As Asian Markets Tanks To A Multi-Year Low
