Trump Reciprocal Tariff Fear Sinks Stock Market into Abyss

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Fear Factor Grips Stock Market Ahead of Reciprocal Tariffs

By S Jha

New Delhi, April 2: The Indian stock markets experienced a significant downturn on Tuesday amid escalating concerns over impending reciprocal tariffs by the United States.

The benchmark Nifty 50 index declined by approximately 1.5% intraday, falling below the 23,200 mark. The index closed beneath its 200-day Exponential Moving Average (DEMA), signaling a bearish trend.

Analysts identify the 23,000 level as a critical support; a breach below this threshold could further empower bearish sentiments, said StockEdge in a post-market commentary on its Telegram channel.

The Nifty Bank index also exhibited weakness, closing below the pivotal 51,000 level. Market participants remain apprehensive ahead of the anticipated tariff announcements by US President Donald Trump, viewing this development as a key determinant for future market direction.

“Sector-wise, the Nifty Realty index emerged as the top loser, shedding 3.1% during the trading session,” said StockEdge. The Kolkata-based advisory firm stated that 23049 is the key support for Nifty. It also added that 50672 is a key support level for Bank Nifty.

The indices traded negatively on a truncated trading week. The Sensex expiry saw the 30-share index plunging by over 1,300 points to close at 76,024.51. The Nifty 50 settled at 23,165.70, down 1.5%. Investor caution prevailed due to uncertainties surrounding the US tariff policies and their potential global economic repercussions.

Nifty resistance is placed at 23565, said StockEdge. It added that the resistance for Bank Nifty is place at 51683.

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Trump is set to announce new tariffs on April 2, which he has dubbed “Liberation Day”. He aims to reduce US reliance on foreign goods. While Trump has indicated these tariffs will be “very kind”, critics warn of a possible chain reaction leading to a global trade war.

As the market navigates these uncertainties, investors are advised to exercise caution and closely monitor developments related to international trade policies, which are poised to significantly influence market dynamics in the near term.

The realty index plunged the most on Tuesday. The IT stocks also took sever beatings in the street.

Two-wheeler stocks somewhat withstood the fury of the bears. Shares of hero Moto Corp and Bajaj Auto stayed in the green through the trading session.

Shares of Indusind Bank also gained strongly. But shares of Indusind Bank were severely mauled recently after its auditor revealed derivate losses in portfolio.