Sensex, Nifty fall amid global equity losses as fresh Trump tariffs take off
RBI's repo rate cut and accommodative policy stance seen as constructive steps to boost economy, but does little to uplift overall market sentiment
Benchmark stock indices Sensex and Nifty closed lower on Wednesday (April 9) in line with losses in global markets after fresh US tariffs on China, even as the Reserve Bank of India (RBI) cut policy rates for a second consecutive time as it sought to bolster the economy in the face of further pressure from damaging US tariffs.
The 30-share BSE Sensex dropped 379.93 points or 0.51 per cent to settle at 73,847.15. During the day, it slumped 554.02 points or 0.74 per cent to a low of 73,673.06.
The NSE Nifty declined 136.70 points or 0.61 per cent to 22,399.15. Intra-day, it tanked 182.6 points or 0.81 per cent to 22,353.25.
Selling pressure
Mirroring weak trends in Asian equities, domestic key equity indices opened lower and remained in the negative territory throughout the session after the US imposed a fresh set of tariffs, including a whopping 104 per cent levy on Chinese imports.
"Global financial markets are witnessing renewed selling pressure following the enactment of reciprocal tariffs," said Vinod Nair, Head of Research, Geojit Investments. "A trade war is escalating global risk, with a rise in US bond yields prompting a sell-off in the world's safe treasury assets."
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"In India, a cut in the repo rate, along with an accommodative policy stance, is taken as a constructive step. However, it has done little to uplift overall market sentiment, as the world is embracing recessionary risk," he added.
Laggards and gainers
State Bank of India was the biggest loser among Sensex shares, dropping by 3.43 per cent amid a fall in banking shares. Tech Mahindra, Larsen & Toubro, Tata Steel, Sun Pharma, Infosys, HCL Tech, Axis Bank, Tata Consultancy Services and NTPC were also among laggards.
Nestle, Hindustan Unilever, Titan, Power Grid, UltraTech Cement and ITC were among the gainers. The BSE smallcap gauge dropped 1.08 per cent and midcap index declined 0.73 per cent.
Among sectoral indices, BSE Focused IT tanked 2.19 per cent, while IT (2.01 per cent), realty (2 per cent), teck (1.57 per cent), metal (1.44 per cent) and industrials (1.42 per cent) also declined.
Auto, consumer durables and FMCG were the gainers.
Asian markets
In Asian markets, Tokyo's Nikkei 225 index and South Korea's Kospi settled lower while Shanghai SSE Composite index and Hong Kong's Hang Seng ended higher. Tokyo's Nikkei 225 index dropped nearly 4 per cent.
Markets in Europe were trading sharply lower. US markets ended significantly lower on Tuesday.
The RBI cut interest rates on Wednesday for a second consecutive time and signalled more easing to come as it sought to bolster the economy in the face of further pressure from damaging US tariffs.
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The Monetary Policy Committee (MPC), consisting of three central bank members and an equal number of external members, voted unanimously to cut the repurchase or repo rate by 25 basis points to 6 per cent. It had reduced rates by an equal measure in February — the first cut since May 2020.
RBI changed its policy stance to "accommodative" from "neutral", indicating the possibility of more rate cuts in future, Governor Sanjay Malhotra said, announcing the MPC decisions.
Trump tariffs
The rate cut came on a day when the full 26 per cent additional tariffs on Indian goods exported to the US came into effect.
The RBI also lowered its estimate for economic growth to 6.5 per cent for 2025-26 from 6.7 per cent earlier. The inflation projection was also lowered to 4 per cent from 4.2 per cent, keeping it within the target range of 2-6 per cent.
"Markets slipped after a brief rebound, losing over half a per cent as the choppy trend persisted. Sentiment took a hit following the announcement of fresh US tariffs on China, leading to a gap-down opening and a largely range-bound session thereafter. The outcome of the MPC meeting — where a 25 bps rate cut was announced along with a shift to an accommodative stance — failed to evoke any meaningful market reaction," Ajit Mishra – SVP, Research, Religare Broking Ltd, said.
Rupee remains weak
The rupee extended its losing streak for the fourth straight session and settled 45 paise lower at 86.71 (provisional) against the US dollar on Wednesday.
Even though crude oil prices fell sharply to a record level and the American currency remained weak, the Indian currency stayed under pressure due to incessant outflow of foreign funds and lacklustre sentiment in the domestic equity markets, forex traders said.
At the interbank foreign exchange, the rupee opened at 86.52 and moved between a high of 86.47 and the low of 86.71 against the greenback during intraday, facing extreme volatility. The unit settled at 86.71 (provisional) against the dollar, sharply lower by 45 paise from the previous closing level.
Foreign Institutional Investors (FIIs) offloaded equities worth Rs 4,994.24 crore on Tuesday, according to exchange data.
Global oil benchmark Brent crude dropped 4.23 per cent to USD 60.16 a barrel.
Indian stock markets will remain closed on Thursday for Mahavir Jayanti.
With agency inputs