Trade Setup for April 7: Focus shifts to RBI policy outcome, TCS results after $5 trillion Wall Street rout

Indian equity markets are bracing for further pain after Friday’s sharp sell-off triggered by global cues. The Nifty 50 shed 346 points to close at 22,904, reflecting widespread weakness across sectors. Analysts now warn that a fall below the 22,800 mark could push the index down toward the 22,350 zone in the near term.

What Triggered the Fall?

The steep decline followed a massive $5 trillion market value erosion on Wall Street. The S&P 500 and Nasdaq fell 6% each, while the Dow Jones plummeted by 2,200 points overnight. The sell-off was sparked by US President Donald Trump's announcement of reciprocal tariffs on 60 countries, including India, causing global investor sentiment to nosedive.

The Nifty Midcap and Smallcap indices were hit even harder, falling by nearly 2,000 and over 4% respectively. The total loss in market capitalisation across BSE-listed companies was estimated at ₹11 lakh crore on April 4.

Sectoral Breakdown

Every major index except FMCG ended in the red. The worst-hit sectors included:

Pharma: Down 4% amid talk of a looming US “pharma tariff”

IT: Also down 4% due to rising fears of a US recession

Metals: Vedanta, Hindalco, Tata Steel, and others dropped 5–9%

Auto: Companies like Tata Motors, Motherson, and Bharat Forge saw sharp declines on tariff concerns

Expert Views on Nifty’s Trajectory

Nagaraj Shetti (HDFC Securities): The short-term trend remains weak. A breach of 22,800 could take Nifty to around 22,350. Any rebound may face resistance near 23,150.

Rupak De (LKP Securities): If Nifty slips below 22,900, it could test 22,676. On the upside, a decisive break above 23,100 might signal a strong recovery.

Om Mehra (SAMCO Securities): The broader support lies near 22,600. A break below that could lead to a slide toward 22,550 due to a gap-fill.

Nifty Bank Outlook

The Nifty Bank index fared relatively better, closing marginally lower at 51,502.70. However, signs of weakness are visible.

Mehra notes that the index could correct to 50,800 if 50,500–50,600 support fails. A strong hold above this zone may fuel a rebound.

Key Stocks to Watch on April 7

Tata Motors: Under pressure after JLR halted US-bound shipments due to new tariffs.

ITC: Raised its stake in Ample Foods to 43.75% with a ₹131 crore investment.

Yes Bank: In focus amid high-level exits and internal restructuring.

Federal Bank: Executive Director Shalini Warrier has announced her resignation, effective between May 15-31.

TVS Motor: Will integrate assets and talent of ION Mobility into its operations.

AstraZeneca Pharma: Received CDSCO approval to import Osimertinib Tablets for a new indication.

Puravankara: Subsidiary Starworth wins ₹118.6 crore project from Ranka Properties.

Godrej Properties: Plans a major residential project in Versova, Mumbai, with a revenue potential of ₹1,350 crore.

Looking Ahead

Markets will closely watch the RBI’s monetary policy outcome on April 9 and the start of Q4 earnings with TCS results on April 10. Meanwhile, continued global volatility and domestic uncertainties may keep investors on edge.

Disclaimer: Please consult certified financial advisors before making investment decisions.