Sensex, Nifty crash: Why stock market is falling today?

Benchmark indices Sensex and Nifty, which regained lost ground after a gap-down start, saw a fresh round of selloff that shaved 1 per cent off the two indices, thanks to weakness seen in IT and private banking shares. There are concerns in the market over the Trump tariff announcements on April 2, which may weigh on IT demand and also market sentiment as a whole. This was reflected in fear gauge India VIX that spurted 9.23 per cent to 13.89. The gauge suggests volatility in the market over the next 30 days.

"US government’s policy changes pertaining to tariffs have manifested in uncertainty over the last three weeks of the quarter. This may impact client decision making and dampen recovery in discretionary spends," said ICICI Securities. Infosys was the worst Sensex performer, falling 2.86 per cent to Rs 1,525. HCL Tech, TCS and Tech Mahindra declined up to 2.4 per cent.

Private lenders too were at the receiving end. HDFC Bank and Axis Bank tanked 2.3 per cent each. Bank stocks slipped after the recent outperformance over other lenders amid a flight-to-safety argument. The asset quality seems less worrisome than feared, with a recovery visible in segments such as unsecured loans, Kotak noted.

Financial stocks Bajaj Finance and Bajaj Finserv dropped 2 per cent each.

At 11.50 am, the BSE Sensex stood at 76,197.94, down 1,216.98 points or 1.57 per cent. The NSE Nifty declined 312.30 points or 1.33 per cent to 23,206.50.  "A key near-term worry is Trump’s likely announcements on April 2, 2025, which, if too harsh on India, can cause another round of correction in the India market," said JM Financial in a strategy note.

Sun Pharma fell 1.76 per cent to Rs 1,704 and was among worst Sensex losers. US President Donald Trump has declared April 2 as ‘Liberation Day’ when the US will impose reciprocal tariffs on countries.

"Going into this event, India pharma stocks have underperformed as investors are concerned about potential negative impact on earnings in case generic companies fail to pass on the impact of tariffs. Since September 2024 (when the likelihood of Trump winning US elections increased and so did concerns about tariffs," Nomura said.

VK Vijayakumar of Geojit Investments said markets globally are focused on the details of Trump’s reciprocal tariffs to be announced tomorrow.

The market trends after the announcements will depend on the details of the tariffs and how they will impact different countries and sectors, he said.

"If the tariffs are severe there can be another round of downturn in the market. Investors can wait and watch and respond after the details are known," he added.

"If India’s tariff on imports from the US is 9.5 per cent, and US’s tariff on imports from India is 3 per cent, then the reciprocal tariff would be 6.5 per cent. We apply this narrow interpretation to our analysis, and see that India, Thailand and Brazil are among the five most exposed," Nomura said.