Mumbai, Apr 7: The Indian stock markets went through a major sell-off on Monday amid global crash, with domestic benchmark indices falling sharply – registering their biggest one-day fall since June 4 last year when the Lok Sabha election results were announced.

However, a slight recovery in the final trading window helped the Nifty climb back above the 22,100 mark, easing some of the day’s earlier losses.

The Sensex tumbled 2,226.79 points, or 2.95 per cent, to close at 73,137.90. During the session, it swung between an intra-day high of 73,284.24 and a low of 71,425.01. Investors lost over Rs 13.5 lakh crore at the closing.

The Nifty followed a similar path, falling 742.85 points or 3.24 per cent to settle at 22,161.60. Tata Steel fell the most by dropping over 7 per cent on both the exchanges.

This sharp decline followed the biggest drop in Asian markets in 14 years, triggered by a slump in Wall Street.

The domestic market sentiment turned negative after US President Donald Trump announced steep tariffs, which were met with retaliatory measures from China.

This standoff between two major global economies has raised fears of a full-blown trade war, which could push the world into recession.

"The market tumbled as the carnage over high US tariffs and the retaliation by other countries may kickstart a trade war,” said Vinod Nair of Geojit Investments Limited.

He added that though the overall impact on India may be limited when compared with other countries, investors are advised to play cautiously during this fray.

“Focus will be on pure-play domestic themes, where the rebound is likely to be fair when the dust settles," Nair stated.

The broader market also faced heavy selling pressure. Both the Nifty Midcap100 and Smallcap100 indices ended over 3 per cent lower.

Sector-wise, metal and realty stocks were the worst hit. The Nifty Metal index fell 6.75 per cent, while the Nifty Realty index dropped 5.69 per cent.

Other sectors like IT, banking, auto, and financial services also posted losses of up to 4 per cent. Even a better-than-expected US job report, which typically boosts global sentiment, failed to calm the nerves of investors as trade concerns took centre stage.

According to Sundar Kewat of Ashika Institutional Equity, the downturn was primarily driven by escalating global uncertainties.

“Weak cues from Wall Street -- where markets closed lower last Friday -- spilled over into global markets, including India,” Kewat said.

“Investor sentiment took a hit amid growing recession fears, exacerbated by heightened global trade tensions,” he added.

Meanwhile, the Indian rupee slightly weakened against the US dollar, closing 61 paise lower at 85.84, compared to Friday’s close of 85.23.

“Rupee is expected to trade in a wide range of 85.25–86.25, with elevated volatility anticipated in the near term," Jateen Trivedi of LKP Securities said.

Gold traded in a volatile range between Rs 87,900 and Rs 88,500 as markets digested the broader impact of the ongoing China-US tariff war.

Sentiment remained cautious with investors looking for further clarity from the US on its next course of action, especially amid escalating trade tensions.

The upcoming US CPI data is expected to play a crucial role in shaping rate cut expectations, which could influence gold's direction globally. Domestically, the RBI policy meet later this week will be closely watched, as rupee volatility is likely to add another layer of uncertainty for MCX Gold, said Trivedi.

(IANS)

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