Indian equities are bracing for a bloodbath at the open today, with the GIFT Nifty futures indicating a staggering 900-point gap-down, tracking the turmoil in global markets. The meltdown comes in the wake of heightened recession fears, escalating tariff tensions led by former U.S. President Donald Trump, and a sharp rout in U.S. and Asian equities.
Global rout weighs heavy on sentiment
Wall Street closed Friday’s session with steep losses as major U.S. indices fell between 5-6%, driven by investor panic over Trump’s aggressive protectionist stance and fears of retaliatory tariffs. The carnage continued in early Monday trading, with Dow futures down another 1,200 points, S&P 500 futures off 4.8%, and Nasdaq futures tumbling over 5%.
The spillover was immediate in Asia, where markets opened deep in the red. Japan’s Nikkei 225 plunged over 6%, while other key regional indices such as the Hang Seng and KOSPI were also trading sharply lower. The panic is largely driven by Trump’s announcement of 25% reciprocal tariffs on foreign-made autos, chips, and select pharma items, sending shockwaves through trade-sensitive sectors.
Domestic pain points grow as tariff worries bite
Back home, Indian equities are expected to reflect the global pain with a massive sell-off across sectors, particularly those exposed to the U.S. and global demand. On April 4, foreign institutional investors (FIIs) dumped Indian equities worth ₹3,484 crore, even as domestic institutional investors (DIIs) tried to cushion the fall with ₹1,720 crore in net purchases.
Sectorally, Nifty IT plunged 9.1% last week, the biggest weekly fall in over a year, amid renewed recession fears in the U.S., its largest market. Nifty Metal lost 7.5%, weighed down by Trump’s tariff offensive despite a weaker U.S. dollar. Nifty Pharma slipped 2.8%, reacting to Trump’s threat to reimpose tariffs on pharma imports, though select names escaped immediate duties.
What’s ahead?
The fear of further de-risking by global investors and the lack of any immediate positive triggers may see Indian indices erase recent gains swiftly, analysts warned. With elevated volatility expected, traders and investors may prefer to stay on the sidelines until there’s more clarity on the trajectory of global trade policies and inflation risks.
Meanwhile, the India VIX—a gauge of market volatility—surged last week and may spike further today, hinting at continued nervousness in the near term. All eyes will be on how the Nifty50 holds up near key psychological levels like 21,000, which could be tested soon.
