Nifty, Sensex Nosedive Amid Global Recession Fears Coupled With US Tariff Shock

Indian share markets plummeted on Monday as escalating global trade tensions and mounting fears of a recession in the United States triggered a widespread sell-off across Wall Street and other Asian markets, reported Hindustan Times.

The benchmark BSE Sensex fell by nearly 5 per cent, opening 3,100 points lower, while the Nifty also tumbled, starting the session 1,200 points down. This marks the sharpest opening decline in Indian markets since the onset of the Covid-19 pandemic.

All 13 major sectors recorded losses. The broader small-cap and mid-cap indices declined by 10% and 7.3%, respectively.

IT firms, which derive a substantial portion of their income from the US, shed 7%. Small-caps and mid-caps also saw further losses of 6.2% and 4.6%, respectively.

Earlier on Monday, other Asian markets also suffered heavy losses. The MSCI Asia ex-Japan index dropped by 6.8%, and Japan's Nikkei 225 slumped 6.5%.

The Nasdaq officially entered bear market territory on Friday, as oil and other commodity prices plunged amidst a sharp global downturn sparked by US President Donald Trump's announcement of sweeping tariffs on Wednesday.

Trump's new tariffs were "larger than anticipated", with significant implications for inflation and economic growth, Federal Reserve Chair Jerome Powell warned on Friday, highlighting an increasingly uncertain economic outlook in the US.

In the two trading days following Trump's 2 April tariff announcement, US markets lost a staggering $5.4 trillion in value, dragging the S&P 500 down to its lowest level in 11 months.

Mirroring the global market carnage, Indian indices also opened to intense selling pressure on Monday.

Japan's Nikkei average fell nearly 9% on Monday, while an index tracking Japanese bank stocks plummeted by as much as 17%, as concerns of a tariff-driven global recession continued to shake investor confidence.

Since Trump unveiled the unexpectedly aggressive levies last week, the Nikkei has dropped 11.6%, while the US S&P 500 has declined by 10.6%.

"It's incredibly difficult to predict the extent of this market correction," said Maki Sawada, an equities strategist at Nomura Securities. "As long as there remains uncertainty around the tariffs and how each nation will respond, markets are likely to remain under pressure."

However, Sawada added, "the market currently appears to be pricing in only negative developments, so should we see any signs of flexibility on tariffs or the introduction of economic support measures, it's quite likely we'll witness a market bottom forming."