Sensex Crashes Over 800 Points, Nifty Below 23,000 – Key Reasons Behind Market Fall

Domestic benchmark indices crashed in early trade on April 4, 2025, mirroring the meltdown in global markets. The Sensex started with a gap-down and slipped 859.61 points or 1.12 per cent to the day’s low at 75,435.75. The Nifty 50 also dropped 328.50 points, or 1.41 per cent to hit the day’s low at 22,921.60.

Broader indices too witnessed a meltdown, as Nifty Smallcap 100 plunged nearly 3 per cent and Nifty Midcap 100 tumbled about 2.50 per cent.

Wall Street benchmark indices saw their one of the worst crashes in years. The S&P 500 index tumbled 4.84 per cent, tech-heavy Nasdaq plunged nearly 6 per cent, and Dow Jones crashed around 4 per cent. The companies listed in S&P 500 lost a combined $2.4 trillion in market capitalisation, their biggest one-day loss since early days of the coronavirus pandemic in March, 2020.

The biggest drags on the Wall Street came from highly valued megacap stocks. Apple fell over 9 per cent, Amazon plunged nearly 9 per cent, and AI chip-making leader Nvidia tumbled 7.8 per cent. Shares of US banks also tumbled to multi-month lows amid concerns that Trump's tariffs could lead to a recession and a slowdown in consumer spending, which would hurt their earnings.

Metals See Meltdown, Financial and FMCG Stocks Buck Trend

Sector-wise, Nifty Metal shed the most, crashing over 5 per cent, dragged by Vedanta, National Aluminum, Hindustan Copper and Hindalco, which fell more than 6 per cent each. All the constituents of the index traded in red in early trade.

Following the metal index, the Nifty Pharma tumbled around 4.50 per cent, dragged by Laurus Labs, Ipca Labs, and Granules. All constituents of the index traded in the red. Nifty IT and Nifty Oil & Gas also slipped over 3 per cent each, while Nifty Realty fell 2.50 per cent and Nifty Auto dived more than 2 per cent.

On the other hand, FMCG and bank and financial stocks bucked the trend to stay afloat in the green. The Nifty FMCG traded almost flat in early trade, however, with a slight positive bias. The Nifty Bank index, which tracks the movement of 12 private and public banks, traded around 0.15 per cent in the positive territory above the 51,650-mark.

Top Gainers and Losers

In the Sensex, Tata Steel, Tata Motors, Larsen & Toubro, Reliance Industries, and IndusInd Bank fell between 4 per cent and 6 per cent to emerge as the top losers. On the other hand, HDFC Bank, Bajaj Finance, Bharti Airtel, Nestle India, Kotak Mahindra Bank, and ITC led the gains, rising up to 2 per cent.

Among the Nifty 50 index, ONGC, Tata Steel, Hindalco, Cipla, Tata Motors, and Larsen & Toubro dragged the index, while Tata Consumer Products, HDFC Bank, Bajaj Finance, Nestle India, Bharti Airtel, and Shriram Finance led the gains.

Why is Stock Market Falling Today

The imposition of tariffs by the US on its trading partners has stoked a global trade war-like situation. While the tariffs are now already in place, they are only going to lead to more uncertainty as investors await to see how other countries are going to respond.

The tariffs announced on April 2, 2025 triggered a massive sell-off in the global markets, and the Trump administration has already drawn flak from other world leaders, with some even threatening to retaliate. The Indian market, particularly, is mirroring this sentiment of uncertainty.

VK Vijayakumar, chief investment strategist at Geojit Financial Services, said that the markets are facing a period of “heightened uncertainty”, which is likely to last for some time.

With the trade war initiated by Trump and the possibility of retaliatory tariffs from China, the EU, and others, the market’s uncertainty and confusion are expected to continue, he said.

“The situation suggests a slowdown in global trade and growth, which will inevitably impact India as well, although the country may fare better than other major economies,” he added.