Sensex Down 3000 Points: Know Key Reasons

Equity markets across the globe went downhill on the back of US President Donald Trump’s sweeping new tariffs, leaving a deep dent on investors' wealth.

Sensex fell by over 3000 points in the early trade, while Nifty50 tumbled more than 5%, mirroring steep losses across Asia and the West.

Investors lose ₹19 Lakh Crore

The market cap of BSE-listed firms fell by ₹19 Lakh crore. All the major sectors traded in red.

Nifty Metal fell by 8%, while IT stocks went down by 7%. Autos, real estate, and oil and gas stocks plunged by more than 5% each.

“These are all unprecedented and unexpected moves in the market. There is a complete global sell-off across markets—Asia Pacific, Japan, Hong Kong. There is nowhere to hide right now,” said Kranthi Bathini, Director – Equity Strategy, WealthMills Securities Pvt Ltd.

Indian equities hit 10-month low

Indian equities hit 10-month low as Sensex crashed by 3,291.95 points to 72,073.14, while Nifty went down by ,058.30 points to 21,846.15 as of 1:24 pm.

Tariff War

Markets remained in poor shape after US President Donald Trump announced reciprocal tariffs ranging from 10% to 50% for several countries, including India. In the Asian markets, Japan’s Nikkei fell by 7%, while South Korea’s Kospi tumbled 5%. Hong Kong’s Hang Seng declined by 10.5%. Nasdaq futures and S&P 500 futures dropped by 4% and 3.1% respectively.

“Globally, markets are going through heightened volatility caused by extreme uncertainty. No one has a clue about how this turbulence caused by Trump tariffs will evolve,” said Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

Recession concerns

Markets are now bracing for a possible recession-like scenario. Investors are parking their funds in safe-haven assets like US Treasuries, which is in turn pushing the 10-year yield down by 8 basis points to 3.91%. Traders are expecting the Federal Reserve to slash interest rates in May.

The sell-off can also be attributed to declining global commodity prices. Brent crude fell down by 6.5%, while WTI plunged by 7.4%. Gold and silver crashed by 2.4% and 7.3% respectively.

Volatility

Market experts have indicated that volatility on Dalal Street is the worst since Covid. “It is unprecedented, but India's volatility and ferocity are much less when compared to the Asian markets this morning,” said Bathini. “As long as there is an uncertainty in the global market sell-off, there is no exception for India. Still, we have to face global music,”he added.

“Wait and watch would be the best strategy in this turbulent phase,” said Vijayakumar, adding, “India is relatively better placed as our exports to the U.S. are only 2% of GDP. Also, negotiations on a bilateral trade deal with the US are progressing.”