On Monday, April 7, 2025, Indian benchmark indices, Sensex and Nifty, opened with significant losses, marking what many are calling 'Black Monday' in the stock market. This downturn follows a global market rout triggered by escalating trade tensions and deepening recession fears in the United States. The total market capitalisation of all BSE-listed companies dropped by ₹19.4 lakh crore, bringing the total value down to ₹383.95 lakh crore.
At 10:20 AM, the BSE Sensex was trading at 72,379.93, down 2,985 points or 3.96%, while the Nifty50 fell to 21,928.55, down 976 points or 4.26%. This crash represents one of the worst falls in the history of these indices, with significant declines across all sectors. Notably, technology firms, which have substantial revenue exposure to the U.S., saw a decline of 7%. The top losers on the Sensex included Tata Steel (-10%), Tata Motors (-7.86%), Infosys (-6.98%), Tech Mahindra (-6.36%), and L&T (-6.45%).
The broader market was equally affected, with small-cap and mid-cap indices registering falls of 10% and 7.3%, respectively. The Nifty Metal index recorded an 8% decrease, while the Nifty IT and other sectors such as Auto, Realty, and Oil & Gas experienced drops exceeding 5%.
Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, commented on the situation, stating, “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. Wait and watch would be the best strategy in this turbulent phase of the market.” He noted that despite the turmoil, India is relatively better positioned, as its exports to the U.S. account for only about 2% of GDP, which minimizes the impact on India's overall growth.
Vijayakumar also highlighted that domestic consumption sectors, including financials, aviation, hotels, select autos, cement, defence, and digital platforms, are likely to emerge relatively unscathed from the ongoing crisis. He suggested that the pharmaceutical sector might also show resilience, as tariffs on this industry are less likely given the current political climate.
The market's decline is part of a broader trend, with the Nasdaq index entering bear market territory after declining over 20% from its latest high. This downturn was exacerbated by the announcement of extensive tariffs by U.S. President Donald Trump, which caught many market participants off guard and raised concerns about a global economic slowdown.
Internationally, Asian markets mirrored this decline. The Japanese Nikkei fell by 7%, while South Korea's Kospi dropped by 5%, and the Hang Seng Index in Hong Kong saw a staggering reduction of over 10.5%. As of Monday morning, the MSCI Asia Pacific Index had fallen as much as 7.9%, marking the steepest decline since October 2008.
In the commodity markets, prices have also plummeted. Brent crude fell by 6.5%, while WTI saw a 7.4% reduction. Precious metals such as gold and silver also experienced significant declines, with gold dropping by 2.4% and silver by 7.3%. Industrial metals were not spared either, as copper fell by 6.5%, zinc decreased by 2%, and aluminum declined by 3.2%. This drop in commodity prices reflects investor unease about the ongoing trade disputes and potential recession.
Market volatility, indicated by the India VIX, surged nearly 60% to its highest level since June 4, 2024. Analysts suggest that in such uncertain conditions, market movements will largely depend on global news flow, and they advise short-term traders to adopt a cautious approach.
Looking ahead, crucial domestic and global events are on the horizon. The conclusion of the Monetary Policy Committee (MPC) meeting on April 9 will be pivotal, followed by important economic indicators such as the Industrial Production Index (IIP) and Consumer Price Index (CPI) data set to be released on April 11. The quarterly earnings season is also set to commence with TCS presenting its results on April 10.
As the global economic landscape continues to shift, investors are advised to stay informed and prepared for further fluctuations in the market. The upcoming week will be critical as international investors closely monitor trade-related developments and their potential impacts on the Indian economy.
