Equity markets witnessed their sharpest single-day fall in three weeks on Tuesday, with the benchmark Sensex plummeting over 1,000 points as fears of retaliatory tariffs by former US President Donald Trump triggered widespread selling across sectors.
The BSE Sensex crashed 1,018.20 points or 1.32 per cent to close at 76,293.60, while the broader NSE Nifty declined 309.80 points or 1.32 per cent to end at 23,071.80, marking their fifth consecutive session of losses. The selloff intensified in the afternoon session, with both indices touching intraday lows.
“Indian markets underperformed global indices as benchmark indices plunged over 1 per cent each on widespread selling, mainly ignited by worries over escalating tariff war after Trump imposed 25 per cent import tariffs on steel and aluminium, which would hurt India’s business prospects,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
The market breadth was overwhelmingly negative, with 3,478 stocks declining against just 525 advances on the BSE. A staggering 479 stocks hit their 52-week lows, while only 55 touched their 52-week highs, highlighting the depth of the selloff.
Small-cap stocks
Mid and small-cap stocks bore the brunt of the selling pressure, with the Nifty Midcap Select falling 2.70 per cent and broader market indices witnessing steeper declines. The Nifty Next 50 tumbled 2.50 per cent.
Among sectoral indices, financial services, healthcare, and realty were the worst hit. Eicher Motors emerged as the biggest loser among Nifty stocks, plunging 6.70 per cent, followed by Apollo Hospitals (-6.61 per cent) and Shriram Finance (-4.51 per cent). On the flip side, Adani Enterprises bucked the trend with a 1.32 per cent gain after announcing a strategic partnership with Mayo Clinic.
“The ongoing uncertainty surrounding US trade policies and tariffs, coupled with domestic economic growth concerns and persistent selling by FIIs, is dampening market sentiment,” noted Vinod Nair, Head of Research at Geojit Financial Services.
The Indian rupee showed some resilience, strengthening above 86.80 against the dollar after hitting a record low of 88.00 in the previous session. “Despite the recovery, volatility remains high, with rupee movement expected in the 86.40 – 87.25 range in the near term,” said Jateen Trivedi, VP Research Analyst at LKP Securities.
Technical analysts pointed to significant pressure on the markets. “Indian benchmark indices traded in the red today due to a 25 per cent tariff on steel and aluminum imports and former US President Donald Trump’s plans to impose reciprocal levies on several countries within the next two days,” explained Ameya Ranadive, Sr Technical Analyst at StoxBox. He noted that throughout the day, Nifty faced resistance from 10EMA, with notable selling observed in the small-cap and mid-cap segments.
Hardik Matalia, Derivative Analyst at Choice Broking, highlighted the options market activity: “Open Interest (OI) data shows the highest OI on the call side at the 23,200 and 23,300 strike prices, highlighting strong resistance levels. On the put side, OI is concentrated at the 23,000 strike price, marking it as a key support level.”
HDFC Securities’ Senior Technical Research Analyst Nagaraj Shetti observed a decisive break of crucial support: “A long bear candle was formed on the daily chart that has decisively broken the crucial support of 23400 levels and closed lower. The larger degree bearish pattern like lower tops and bottoms is visible on the daily chart.”
“The index continues to decline as it remains below the critical 21EMA moving average,” noted Rupak De, Senior Technical Analyst at LKP Securities. He identified the 22,900–22,940 zone as strong support, while resistance is placed at 23,300.
Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates, emphasized the broader market weakness: “The broader market underperformed Nifty, with the Nifty Midcap 100 and Nifty Smallcap 100 indices losing around 3.02 per cent and 3.45 per cent, respectively.” He advised that sustaining below 23,000 could extend the decline to 22,800.
“The Nifty’s drop below 23,200 has derailed the recovery prospects, with a potential retest of 22,800 ahead,” warned Ajit Mishra, SVP Research at Religare Broking Ltd.
Market participants are now closely watching Prime Minister Modi’s upcoming US visit for potential relief in trade uncertainty, while today’s US inflation data remains another key focus area. The heightened volatility and continued foreign outflows suggest that markets may remain under pressure in the near term.
