Sensex, Nifty down today: Why stock market is falling after Donald Trump’s speech

US President Donald Trump’s much-awaited speech on the Iran war failed to cheer investors in Asia, with markets from Korea to Japan falling up to 4 per cent, amid the absence of a clear timeline for an end to the conflict. Indian equities, which had rallied in the previous session, were no exception. Trump, who was earlier suggesting an Iran exit, even without any deal on Strait of Hormuz, declared the US was going to hit Iran "extremely hard" in the next two to three weeks.

Brent crude futures for June delivery jumped 4.64 per cent to $105.85 and the US 10-year bond yield firmed up to 4.36 per cent, hurting investor sentiment. The BSE Sensex opened the day at 72,262.05, down 872.27 points or 1.19 per cent. It extended decline to nearly 1,400 points within seconds. The NSE Nifty stood at 22,383.40, down 296 points or 1.31 per cent.

"Trump’s statement that he will finish the job in two to three weeks cannot be taken at face value since the US President has been notoriously inconsistent in all his views. He can change his position anytime," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.

Sun Pharma, InterGlobe Aviation, Adani Ports, Asian Paints and Eternal led the fall at Sensex, shedding 3-4 per cent. State Bank of India, Trent and UltraTech Cement fell up to 3 per cent. HCL Technologies was the lone Sensex gainer at Rs 1,359.25, up 0.3 per cent.

Adding to the concerns, Trump struck a defiant tone on energy and global markets, insisting the US will not bear the burden of reopening the Strait of Hormuz and arguing that American strength has forced Iran into a weakened position after a month‑long conflict, Devarsh Vakil, Head of Prime Research at HDFC Securities said.

Vakil noted that the Strait of Hormuz remains largely closed, disrupting an estimated 10–15 million barrels per day of supply — the largest oil supply shock in history by volume.

Nomura economist Sonal Varma noted that Iran, on the other hand, is prodding the Houthis to disrupt Red Sea shipping in the event of further escalation. Any disruption to Red Sea shipping would result in a double chokehold, as it would block transit via the Bab el-Mandeb Strait and the Suez Canal, at a time when the Red Sea is providing an alternative to the Strait of Hormuz. 

"Since the Houthi attacks in 2023, global trade via the Red Sea has fallen, but the Bal el-Mandeb Strait and Suez Canal still account for 9per cent of global maritime traffic, 20 per cent of global container traffic and 8.7 per cent of world oil supply. The Cape of Good Hope is an alternative route that will be used, but it involves longer transit times, higher fuel costs and increased freight rates," she noted. 

Vijayakumar noted that FPIs continued selling equities heavily with a net sell figure of Rs 8,331 crores on April 1. He said high crude price, the widening trade deficit, the fear of declining remittances and sustained FPI selling are acting cumulatively to put high pressure on the rupee which continues to decline despite RBI’s decisions on restrictions on dollar futures deals.