'Biggest risk to Indian market is...': Helios Capital's Samir Arora as markets plunge ahead of US tariffs

Helios Capital's Samir Arora on Wednesday flagged concerns over India's market vulnerability, not from direct tariffs, but from ripple effects originating in the United States. "I think the biggest risk to Indian market is not tariffs applied to India but what happens to the US market and economy due to various tariffs, which then affects other markets and sectors like Indian IT," Arora wrote on X.

His comments come as markets reel from anticipation of fresh reciprocal tariffs from the US, expected to take effect on April 2 — a date President Donald Trump has labelled "Liberation Day". On Tuesday, the Indian stock market logged its steepest one-day fall in a month, dragged down by IT and private banking stocks.

The BSE Sensex plunged 1,390.41 points to close at 76,024.51, while the Nifty fell 353.65 points to 23,165.70. The Sensex had slumped as much as 1,502.74 points intraday. Among the biggest laggards were HCL Tech, Infosys, Bajaj Finserv, HDFC Bank, ICICI Bank, Reliance Industries, and Tech Mahindra. IndusInd Bank, however, jumped over 5 per cent, and Zomato ended slightly higher.

"Amid heightened global volatility ahead of the anticipated US reciprocal tariff announcement tomorrow, the domestic market witnessed a significant sell-off today," said Vinod Nair, Head of Research, Geojit Financial Services. "The IT sector was among the hardest hit due to its substantial exposure to the US market."

Ajit Mishra, SVP, Research at Religare Broking, added that "uncertainty surrounding the US reciprocal tariff rates ahead of the April 2 deadline and its potential impact on global trade led to a negative opening, which worsened as the session progressed."

Arora, in a post on March 10, had foreshadowed the risk reversal. "How times change: Till recently investors were selling out of Indian market (& others) to buy into US market and now the biggest risk to India is the weakness in the US market," he had noted.

Market participants have become increasingly sensitive to shifts in global demand, especially in export-dependent sectors like IT and manufacturing. On Tuesday, the BSE Focused IT index fell 2.42 per cent, and the broader IT index slipped 2.24 per cent. Financial services, consumer durables, and realty stocks also faced sharp losses.

While most Asian markets closed in the green — Seoul, Tokyo, Shanghai, and Hong Kong logged gains—India’s reaction was sharply negative. In contrast, US markets ended mostly higher on Monday. 

Foreign institutional investors offloaded ₹4,352.82 crore worth of equities on Friday. Brent crude also edged higher by 0.12 per cent to USD 74.86 a barrel, adding to macroeconomic jitters.

Despite Tuesday’s decline, the Sensex has gained 5.10 per cent so far this financial year, and the Nifty 5.34 per cent. But with rising global tensions, Arora’s caution serves as a reminder that what happens overseas—especially in the US—could weigh heavily on India's markets in the weeks ahead.