Sensex, Nifty Crash 3% But Late Rally Prevents Deeper Fall

Global Panic Hits Indian Markets, But Late Rebound Limits Deeper Losses

India’s stock markets had a rough start to the week as global recession fears and tariff shockwaves rattled investor sentiment on Monday, April 6, 2025. The BSE Sensex and Nifty 50 both opened with deep cuts, mimicking a widespread sell-off across Asia and Wall Street triggered by U.S. President Donald Trump’s sweeping new tariffs.

However, by the end of the day, a bit of late buying helped major indices recover part of the day’s losses  although the fall still remained steep.

🇮🇳 Indian Markets Open in Panic Mode

At the opening bell, the Nifty 50 was down 5% at 21,758.40, while the Sensex plunged 5.29% to 71,379.89. The sell-off was broad-based  all 13 sectoral indices were painted red.

• Small-cap stocks dropped a staggering 10%,
• Mid-cap stocks fell 7.3%,
• Banking, metal, auto, and IT stocks were the worst hit. 

The panic was sparked by Wall Street’s brutal tumble on April 4, where the Nasdaq officially entered bear market territory, following Trump’s tariff escalation.

 Explore more: What is a bear market? (Investopedia)

Trump’s Tariff Bomb Drops a Global Shockwave

On April 2, President Donald Trump stunned global markets by imposing 10% blanket tariffs on most imports and “reciprocal” duties of up to 26% on countries like India.

 Related: Trump slaps 26% tariff on Indian goods

By April 4, commodities from oil to metals nosedived, and U.S. equity indices  especially the Nasdaq and S&P 500  plunged.

• The Dow Jones dropped over 1,200 points,
• The S&P 500 neared bear market territory,
• Investors fled to U.S. Treasuries, causing yields to plummet. 

This ripple effect quickly made its way to Asian trading floors, with India among the worst-hit.

 Read also: How tariffs affect stock markets (Forbes)

 India’s Intraday Crash: Major Losses by Noon

Throughout most of the trading session, the market remained in deep red.

• Tata Steel led the losers, crashing 7.73% to ₹129.60
• Larsen & Toubro fell 5.78%,
• Tata Motors declined 5.54%,
• Kotak Mahindra Bank, Infosys, and ICICI Bank also saw losses over 3%.

One outlier in this sea of red? Hindustan Unilever Ltd (HUL), which ended the day slightly higher at ₹2,250.15, gaining 0.25% after a late rally.

 Afternoon Momentum Saves the Day from Total Collapse

The Sensex, which had plunged over 2,200 points in early trade, recovered slightly towards the close  ending the day at 73,137.90, down 2.95%.

The Nifty 50, too, avoided slipping below the crucial 22,000 mark, closing at 22,161.60, a decline of 3.24%.

Analysts attributed this modest comeback to short covering and selective institutional buying, especially in FMCG and defensive sectors.

 Learn: What is short covering? (Wikipedia)

 What Triggered This Global Sell-Off?

This wasn’t just another bad day for the markets. The root cause lies in:

• Global Trade War Fears: Trump’s tariffs threaten global supply chains.
• Commodities Crash: Oil and metals nosedived, signaling economic slowdown.
• Bear Market Confirmation in the U.S.: Nasdaq has now dropped over 20% from its recent highs.
• Recession Talk: Bond yields suggest growing fear of an economic contraction. 

 Why markets fear yield curve inversion (Investopedia)

 What Are Analysts Saying?

“Investors are fleeing risk assets. The concern is not just the tariffs but what comes next  retaliations, supply disruptions, and inflation," said Rakesh Sharma, Head of Equity Research at FinVista Capital.

“Even with the rebound, this isn't a dip you buy  it's a dip you study,” remarked Anjali Mehta, market strategist at Kaveri Financials.

 Sector-Wise Breakdown

Here’s how key sectors fared during the bloodbath:

• Metals: -6.5% (Led by Tata Steel, JSW Steel)
• Auto: -5.3% (Tata Motors, M&M)
• IT: -4.1% (Infosys, Wipro)
• Banks: -3.8% (ICICI, Kotak, Axis)
• FMCG: -0.4% (Relatively resilient, HUL in green)

 What to Watch This Week

Markets remain on edge. Key things to monitor include:

• Retaliation from India, EU, and China
• Central bank responses (RBI commentary expected Thursday)
• U.S. CPI inflation data due Friday
• Crude oil stability and bond market trends

 Further reading: How inflation impacts stock returns

 Final Thoughts

India’s stock markets weren’t spared as global markets nosedived on April 6. Trump’s tariff tsunami triggered panic selling, wiping off billions in market value. However, thanks to a late afternoon bounce, the Sensex and Nifty ended just under 3% lower  far better than their worst intraday levels.

The message from today: Volatility is back. Traders should brace for more swings this week as geopolitical and macroeconomic uncertainties dominate.

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