Global market turmoil: Sensex and Nifty plummet amid escalating trade tensions

Sensex, Nifty plunge over 3% in ‘Black Monday’ sell-off

Indian stock markets experienced a significant downturn on April 7, 2025, with the BSE Sensex plunging 2,784.23 points (3.69%) to 72,546 and the Nifty50 dropping 910.65 points (3.98%) to 21,993, marking their steepest declines since early June. This sharp fall resulted in a market capitalization loss of approximately Rs.19.4 lakh crore, bringing the total to Rs.383.95 lakh crore.

​Market volatility surges​

The India VIX, a measure of market volatility, surged by 55% to 21.79, reflecting heightened investor anxiety. All major sectoral indices ended in negative territory, with Nifty Metal sinking 8% and Nifty IT sliding over 7%. The broader market also suffered, as the small-cap index dropped 10% and the mid-cap index declined 7.3%.

​Global trade tensions escalate​

The market downturn is largely attributed to escalating global trade tensions. US President Donald Trump imposed a 34% tariff on Chinese imports, prompting China to retaliate with a matching 34% tariff on all US goods, effective April 10. This tit-for-tat has intensified fears of a global trade war, leading to significant market volatility worldwide. ​

​Asian markets mirror Wall Street’s decline​

Asian markets mirrored Wall Street’s downturn. Japan’s Nikkei 225 tumbled nearly 9%, triggering a trading halt as futures were suspended due to circuit breakers. Hong Kong’s Hang Seng and China’s Shanghai Composite also experienced significant losses, reflecting the widespread impact of the escalating trade disputes.

​Investor sentiment and economic outlook​

Investor sentiment has been severely impacted by the uncertainty surrounding global trade policies. The ongoing disputes and their potential to disrupt global supply chains have led to increased market volatility and a shift toward safe-haven assets. Market participants are advised to monitor developments closely and consider strategies to mitigate potential risks associated with heightened volatility.

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