BAROMETERS DROP IN EARLY TRADE; NIFTY BELOW 22,100

The domestic equity indices traded with major losses in early trade, mirroring a global market rout driven by escalating trade tensions and mounting recession fears in the United States. The Nifty traded below the 22,100 level.

All the sectoral indices on NSE traded in the red with metal, IT and media shares declining the most.

At 09:30 IST, the barometer index, the S&P BSE Sensex, slumped 2,592.98 points or 3.44% to 72,771.71. The Nifty 50 index tanked 847.75 points or 3.70% to 22,056.70.

In the broader market, the S&P BSE Mid-Cap index dropped 3.78% and the S&P BSE Small-Cap index tumbled 5.09%.

The market breadth was weak. On the BSE, 255 shares rose and 2,941 shares fell. A total of 106 shares were unchanged.

Foreign portfolio investors (FPIs) sold shares worth Rs 3,483.98 crore, while domestic institutional investors (DIIs) were net sellers to the tune of Rs 1,720.32 crore in the Indian equity market on 4 April 2025, provisional data showed.

The NSE`s India VIX, a gauge of the market`s expectation of volatility over the near term, climbed 49.29% to 20.54.

Economy:

India�s foreign exchange (forex) reserves jumped $6.596 billion to $665.396 billion during the week ended March 28, according to the latest data from the RBI.

For the week ended March 28, foreign currency assets, a major component of the reserves, increased by $6.158 billion to $565.014 billion, the RBI data released on Friday showed.

Gold reserves increased by $519 million to $77.793 billion during the week ended March 28. The special drawing rights (SDRs) were down by $65 million to $18.176 billion, the RBI said.

India�s reserve position with the IMF was also down by $16 million at $4.413 billion in the reporting week, the apex bank data showed.

Stocks in Spotlight:

IndusInd Bank slipped 3.46%. The banks total deposits jumped 6.8% to Rs 4,11,140 crore as of 31st March 2025 as compared with Rs 3,84,793 crore as of 31st March 2024.

Force Motors dropped 6.71%. The company�s domestic sales jumped 11.02% to 3,606 units in March 2025, as against 3,248 units sold in March 2024.

Indian Bank lost 3.21%. The company�s total deposits jumped 7.12% to Rs 7.37 lakh crore as of 31st March 2025 as compared with Rs 6.88 lakh crore as of 31st March 2024.

Numbers to Track:

The yield on India`s 10-year benchmark federal paper was rose 1.81% to 6.577 as compared with previous close 6.460.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 85.6375, compared with its close of 85.4400 during the previous trading session.

MCX Gold futures for 5 June 2025 settlement shed 0.19% to Rs 87,896.

The US Dollar index (DXY), which tracks the greenback`s value against a basket of currencies, was down 0.08% to 102.94.

The United States 10-year bond yield dropped 1.30% to 3.939.

In the commodities market, Brent crude for June 2025 settlement fell $1.86 or 2.84% to $63.75 a barrel.

Global Markets:

Dow Jones futures cratered by a jaw-dropping 1,054 points, setting the tone for what could be a turbulent day on the trading floor.

Asian market also registered significant losses following China�s retaliatory tariffs in response to recent U.S. trade measures, deepening concerns about a prolonged trade conflict between the world�s two largest economies.

Last week, President Donald Trump announced a 10% universal import tariff effective April 5. Additional tariffs targeting key trade partners, including China, Vietnam, Japan, and the European Union, are scheduled to take effect on April 9.

In retaliation, China imposed a 34% tariff on a range of American goods, marking a sharp escalation in trade tensions. The European Union, meanwhile, is seeking alignment among its member states to craft a coordinated response, potentially involving further countermeasures.

The escalating trade conflict has raised fears of a global trade war, with potential ramifications for international supply chains, inflation, and economic growth.

In Japan, the Nikkei 225 index fell as much as 9% on Monday, reaching its lowest level since early November 2023. Japan�s export-driven economy, particularly in sectors such as automotive, technology, and manufacturing, is considered especially vulnerable to rising U.S. tariffs.

On Friday, U.S. markets had already reacted negatively to the trade developments. The Dow Jones Industrial Average declined 5.50%, marking its steepest drop in over three years. The S&P 500 fell 5.97%, and the Nasdaq Composite dropped 5.82%, with all three indices closing at six-month lows.

Despite mounting concerns, Treasury Secretary Scott Bessent downplayed fears of an imminent recession in a media interview. Federal Reserve Chairman Jerome Powell also emphasized that there is no immediate need for a change in interest rates. He noted that the administration�s trade policies could simultaneously push inflation higher while slowing economic growth.

Meanwhile, March�s nonfarm payrolls data provided a positive signal, coming in at 228,000 jobs added � a notable increase from February�s revised figure of 117,000.

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