Sharp Decline in the Stock Market: Sensex Falls 2.65%, IT Index Suffers Biggest Weekly Drop of 9.2%, Investors Lose ₹10 Lakh Crore; Trump Tariffs and Global Recession Fears Cited as Major Causes.
Stock Market Wrap up: The Indian stock market witnessed a significant downturn in the first week (March 31st to April 4th) of fiscal year 2025-26. The week began with a sharp fall and ended on a weak note. The market closed in the red for three trading sessions, with only one day showing gains. Monday was a trading holiday due to Eid.
Significant Drop in Sensex and Nifty
The Nifty-50 index declined by 2.61% during the week, closing at 22,904.45. Similarly, the BSE Sensex fell by 2.65%, settling at 75,364.69. Both indices closed in the negative on Friday (April 4th), with the Nifty down 1.5% and the Sensex down 1.2%.
IT Sector Hit Hardest
The IT index experienced a 9.2% drop this week, marking its largest weekly decline in the past five years. The IT sector was most affected by concerns of a recession in the US economy.
Decline in Metal and Energy Stocks
Concerns over global growth and a fall in crude oil prices impacted the metal and energy sectors. The metal index fell by 7.5%, and the energy index declined by 3.8%.
Pharma Sector Sees Volatility
The pharma sector experienced a volatile week. News of tariff concessions boosted pharma stocks on Thursday, but the threat of new tariffs from US President Donald Trump caused the pharma index to fall by 4% on Friday, resulting in a 2.7% decline for the week.
Mid-cap and Small-cap Stocks Also Plunge
Along with large-cap stocks, mid-cap and small-cap stocks also witnessed significant selling pressure. The mid-cap index fell by 2%, and the small-cap index dropped by 2.6% this week.
Major Reasons Behind Market Decline
Impact of Trump's Tariffs: US President Donald Trump's decision on reciprocal tariffs intensified the global trade war, increasing recessionary fears and negatively impacting the Indian market.
Decline in Reliance Industries and the IT Sector: Weakness in these sectors put significant pressure on the market.
Potential US Tariffs on the Pharma Sector: The possibility of US government tariffs on the pharma sector further fueled investor concerns.
