Though many analysts are of the view that the punitive tariffs that the US has slapped on exports are of “only minimal consequences,” the domestic equity markets have reacted negatively a day before the tariffs coming into force.
Benchmark indices on Tuesday logged their steepest single-day fall in a month. Both the Sensex and the Nifty went into a tailspin on the first day of the new financial year, with the former plunging by 1,390 points or 1.80% to settle at 76,024.51 and the latter plummeting 353.65 points or 1.50% to close at 23,165.70 following heavy selling in IT and banking counters led by HDFC Bank, leaving investors on the edge.
The rupee, which had notched up the best monthly gains since November 2018 in March rallying 2.2%, closed the fiscal with a 2.5% loss. The domestic currency opened the new year on a sober note, losing 21 paise to close at 85.65 from Friday’s close.
The 30-share Sensex saw many as 28 of its components bleeding deep. During the day, the index plummeted 1,502.74 points or 1.94%, while 35 of the 50 Nifty components bled through the day.
US president Donald Trump on Sunday said his punitive tariffs would be in force from April 2, applicable on all exporting countries to the US.
In fact for the markets, this is the second consecutive fall as the most indices closed in the red last Friday too. Tuesday’s trade marked the biggest intraday drop for both indices since February 28, when they tumbled nearly 2%. The sharp decline also pulled both Nifty and Sensex back to their March 21 levels.