Trump’s Tariff Announcement Triggers Market Turmoil: Sensex Falls Over 300 Points, Nifty Drops 100 Points; IT & Auto Stocks Decline

Global stock markets are in turmoil following U.S. President Donald Trump’s announcement of new tariffs. From Asian markets to Wall Street, a widespread decline is being observed. This decision has also impacted the Indian stock market, where both Sensex and Nifty opened with significant losses.

On April 3, the Indian stock market witnessed a sharp decline. The Sensex plunged over 300 points, trading at 76,300 levels, while the Nifty fell by nearly 100 points, trading at 23,250 levels. IT, auto, and banking stocks suffered major losses.

Asian Markets Also Decline

Asian markets reacted negatively to the announcement:

• Japan’s Nikkei dropped 2.95%

• China’s Shanghai Composite fell 0.50%

• Hong Kong’s Hang Seng Index declined 1.77%

However, U.S. markets showed mixed results on April 2:

• Dow Jones rose 0.56%, closing at 42,225

• Nasdaq Composite gained 0.87%

• S&P 500 increased 0.67%

Foreign Investors Continue Selling

On April 2, Foreign Institutional Investors (FIIs) offloaded shares worth ₹1,538 crore, while Domestic Institutional Investors (DIIs) bought shares worth ₹2,808 crore.

Three Key Reasons Behind the Market Decline

1. Trump’s New Tariffs:

   • The U.S. has announced a 26% tariff on Indian goods.

   • Other affected countries include China (34%), the European Union (20%), South Korea (25%), Japan (24%), Vietnam (46%), and Taiwan (32%).

2. Foreign Investor Sell-Off:

   • FIIs are continuously pulling funds from the Indian stock market, adding selling pressure and driving stock prices lower.

3. Economic Uncertainty:

   • Concerns over a global economic slowdown are rising.

   • The U.S. GDP is expected to contract by 2.8% in Q1 2025, weakening investor confidence and increasing stock market volatility.

Markets Gained on April 2

Interestingly, the stock market performed well on April 2, with the Sensex surging 592 points to close at 76,617, and the Nifty rising 166 points to 23,332.

This volatility underscores the uncertainty in global markets amid economic and geopolitical tensions.