On April 7, 2025, the Indian stock market experienced a dramatic selloff, leading to significant losses across major indices. Half of the 30 stocks in the Sensex plunged over 5%, with Tata Motors and Tata Steel among the hardest hit, reflecting widespread panic among investors amid escalating trade tensions.
The BSE Sensex index crashed by 3,939.6 points, or 5.2%, hitting an intraday low of 71,425. The Nifty 50 index dropped below 21,750, further illustrating the market's distress. This downturn was largely attributed to the aggressive reciprocal tariffs announced by U.S. President Donald Trump, which sparked fears of a global trade war.
According to market analysts, the Nifty IT index also showed signs of weakness, with a trendline breakdown indicating potential further declines. Rupak De from LKP Securities noted, "We expect an extension of the current weakness and the index might fall towards 32,400 in the short term. Again a fall below 32,400 might trigger more correction." De's insights reflect a broader bearish sentiment in the market, particularly within the IT sector, which was among the worst affected.
As the trading day unfolded, Tata Motors' stock plummeted 10.31% to ₹550.55 per share after the company's UK arm, Jaguar Land Rover (JLR), announced a halt in exports to the U.S. due to Trump's 25% tariff on non-U.S. manufactured cars. JLR, which sold 430,000 vehicles globally in the financial year 2023-24, relies heavily on the U.S. market, which accounted for 23% of its revenue.
Tata Steel also faced a significant decline, dropping 11.5% to an intraday low of ₹124.2 per share. This drop was compounded by a double whammy: not only were metal stocks under pressure from global growth concerns, but Tata Steel was also served an income tax notice that increased its taxable income by ₹25,185.51 crore for the financial year 2018-19.
IndusInd Bank shares fell 9.4% following a dismal quarterly update that revealed a mere 1.4% year-on-year increase in net advances, indicating a slowdown in loan growth. Similarly, Reliance Industries saw its stock drop 7.4% to a fresh 52-week low of ₹1,115.5 per share, driven by falling crude oil prices and concerns over global demand.
In total, 734 stocks hit their 52-week lows by 11 AM, with several major companies, including Infosys and Larsen & Toubro, also experiencing steep declines. Infosys' share price fell 9.9% to ₹1,307.10, while L&T dropped 9% to ₹2,967.65, both reflecting the broader market malaise.
Market experts are urging caution, with many advising investors to avoid panic selling and to consider buying quality stocks at discounted prices. Pranay Aggarwal, Director & CEO of Stoxkart, emphasized the importance of maintaining a calm approach, stating, "Today’s Black Monday has shaken Indian markets, but investors and traders must stay calm." He encouraged investors to continue systematic investment plans (SIPs) while reviewing their portfolios for diversification.
Despite the tumultuous market conditions, some analysts remain optimistic about specific sectors. Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services, suggested that domestic consumption themes, particularly in financials, aviation, and digital platforms, might weather the storm better than others. "Globally markets are going through heightened volatility caused by extreme uncertainty. Wait and watch would be the best strategy in this turbulent phase of the market," he advised.
The overall market capitalization of BSE-listed firms dropped significantly, from over ₹403 lakh crore to ₹384 lakh crore, resulting in nearly ₹19 lakh crore lost in a single session. This sharp decline underscores the severity of the reaction to international trade developments and the resulting investor sentiment.
Looking ahead, analysts predict that if the Nifty index falls below the support level of 22,676, it could trigger further selling pressure, potentially driving the index back towards 22,000. The RSI (14) has entered a bearish crossover, signaling short-term bearish momentum that could further impact trading decisions.
As the market grapples with these challenges, the uncertainty surrounding global trade relations remains a significant concern. The interplay of domestic economic indicators and international developments will likely continue to influence market performance in the coming weeks.
In summary, the Indian stock market's performance on April 7, 2025, reflects a complex interplay of global and domestic factors, with significant implications for investors navigating an increasingly volatile landscape.
