The stock market is heading for a major correction. GIFT Nifty, which at one point slipped below 22,000, later trimmed some losses. US markets witnessed their biggest weekly fall since March 2020 during the Covid epidemic. On April 7, US futures and Asian markets are deep in the red.
Donald Trump’s tariff war and China’s retaliatory stance have led to fears of an inevitable global recession. Even though Trump reiterated that there would be no change in his stance, countries including India are trying to resolve matters by reducing tariffs. Market direction hinges on the outcome of these efforts. A long winter may be in store for investors, and those looking to invest may need to wait longer.
In derivatives, GIFT Nifty closed Friday at 22,343.50. It fell to 21,951 in early trade today before recovering to 22,140. This signals a weak opening for the Indian market today.
European markets closed over 5% lower on Friday. Recession fears are spreading across the board. US markets ended Friday with the steepest drop since the Covid crash. The S&P 500 is now 17.75% below its record high from February.
JP Morgan economists now estimate a 60% probability of a recession. Although Trump said he wishes to see markets rise, his remark that bitter medicine might be needed in some stages added to market anxiety.
On Friday, the Dow Jones crashed 2231.07 points (5.50%) to close at 38,314.90. The S&P fell 322.44 points (5.97%) to 5074.08, and Nasdaq lost 962.82 points (5.87%) to end at 15,587.80. US futures continue to trade lower today — Dow down 2.95%, S&P 3.69%, Nasdaq 3.9%.
Asian markets are also facing a sharp selloff. Japan’s Nikkei was down 8.5% in early trade; South Korea’s KOSPI down 4.5%. The Australian market opened 6% lower. Hong Kong’s Hang Seng fell 10%, and China’s CSI index dropped 5%.
Indian authorities still express hope that the US will agree to reduced counter-tariffs. Online discussions are ongoing for a trade agreement. India does not intend to impose retaliatory tariffs but is in talks to reduce import duties on US goods.
On Friday, Nifty fell 345.65 points (1.49%) to close at 22,904.50. Sensex lost 930.67 points (1.22%) to end at 75,364.69. Bank Nifty declined 94.65 points (0.18%) to 51,502.70. The mid cap index dropped 2.91% (1516.20 points) to 50,645.95, and the small cap index plunged 3.56% to 15,675.95.
Market breadth turned negative — on the BSE, 1025 stocks advanced, while 2923 declined. On the NSE, 646 gained while 2230 fell. On the NSE, 26 stocks hit 52-week highs and 66 hit 52-week lows. While 146 stocks hit upper circuits, 108 hit lower circuits.
Foreign investors sold ₹3483.98 crore worth of equities in the cash market on Friday. Domestic funds sold stocks worth ₹1720.32 crore. Market sentiment has turned bearish. Nifty falling below 23,000 has dampened hopes. If 22,500 support breaks, the next level is 22,300. Chart-based support-resistance levels appear meaningless for now.
With uncertainty turning into outright panic, the market sees Trump’s tariff announcement as the beginning of a downturn. This has led to a fall in gold prices. Last week, gold fell from $3167 to $3015 per ounce before closing at $3038.80. It climbed to $3046.60 this morning. While spot gold lost 2.5% on Friday, weekly losses stood at just 1.9%. In holiday trading, gold fell 4.25% over two days to $3056.
While gold continues to hold above $3000, technical analysts warn that a fall below this could drag prices down to $2800. Others argue that economic uncertainty, which earlier pushed gold above $3100, could still support further gains.
In Kerala, gold prices fell ₹1280 on Friday and ₹720 on Saturday to ₹66,480 per sovereign — a two-day fall of ₹2000.
Silver plunged last week. Over two days, it collapsed 15% to close at $29.55 per ounce. The trend may continue, although it rebounded to $30.55 this morning. Aluminium prices fell 7% last week, and copper declined 13%. The tariff war and recession fears were the key reasons. Rubber dropped 3%, coffee 5%, cocoa 8%, and palm oil 3.5% in global markets last week.
The dollar index closed higher on Friday after a volatile session. It dropped to 101.54 before climbing to 103.18 and settling at 103.02. It slipped to 102.89 in early trade today.
US bond prices rose on Friday, lowering yields. The 10-year yield fell to 4.00%. This morning, yields dropped further to 3.89%.
Crude oil is falling in anticipation of a global recession. US crude dropped below $60 per barrel — down 12% over three days. Brent crude closed at $65.58 on Friday and dropped further to $63.95 today. WTI was at $60.45, while UAE’s Murban crude dropped to $66.11.
The tariff war triggered a crash in cryptocurrencies. A major selloff hit on Sunday evening. Bitcoin dropped 6% to below $77,900. Ether plunged 12% to around $1575. Other cryptos fell between 12% and 16%.
