Early Market Crash Erases INR 19 Lakh Crore in Investor Wealth Within Seconds The Nifty 50 fell 5 per cent, opening at 21,758 — marking its biggest intraday loss since March 2020. The BSE Sensex also opened with a sharp decline of 5.19 per cent, at 71,449, a news report stated. The drop was result of panic selling witnessed across Asian markets

Market data revealed that tariffs imposed by US President Donald Trump have sparked global turmoil, dragging Indian equity markets to a 10-month low and wiping out over INR 19 lakh crore in investor wealth within seconds of market opening on April 7.

The Nifty 50 fell 5 per cent, opening at 21,758 — marking its biggest intraday loss since March 2020. The BSE Sensex also opened with a sharp decline of 5.19 per cent, at 71,449, a news report stated. The drop was result of panic selling witnessed across Asian markets.

"The stock market meltdown in India was expected, due to the global fall in markets including the Dow, Nikkei and Hang Seng indices. While the Trump tariffs were expected, what caused the sharp global sell-off initially was a much higher tariff rate than expected, making the US the highest tariff country in the world. The implied inflation due to the higher cost of imports for the US customer, combined with the lack of growth due to demand uncertainty and destruction, raised the spectre of stagflation, which is the kiss of death for equity markets. The icing on the cake was the retaliatory tariffs and rare earth embargo imposed by China on the US. China's actions imply greater escalation, as Trump has threatened to hike the tariffs even higher in the event of a country retaliating with higher tariffs of their own. The rare earth embargo means that US tech companies like Nvidia and Tesla will find it difficult to source critical elements of their supply chain. In the short term, the most likely scenario is a global slowdown, which will have an impact on Indian companies too. That explains the sell-off in the Indian markets," said Dr Rushi Anandan, Associate Professor, General Management, K J Somaiya Institute of Management, Mumbai.

On April 2, Trump announced a 26 per cent reciprocal tariff on Indian exports to the United States. The decision brought chaos to the market as the effect of the tariff began to take form to all the 180 countries where trade restrictions were imposed.

As the day progressed, the broader market continued to see cuts, as the BSE Midcap Index fell by 3.97 per cent to 38960.46, while the BSE Smallcap Index continued to show red at 4.84 per cent to 43748.60.

The rupee also opened lower this morning, falling 30 paise to 85.74 against the US dollar.

"The current market environment is one of the most complex we've seen in recent times. A slow-moving correction has now turned into a broad-based global sell-off. From Wall Street to Dalal Street, capital markets are reacting to every news, resulting in a continuous shift of sentiments. The volatility is sharp and unexpected. Especially in India, we've been seeing consistent pressure for nearly six months now, gradually eroding investor confidence. What's different this time is that even companies with strong earnings and clean fundamentals haven't been spared. Everything is falling, no matter how strong the stock is. The old idea of 'buy the dip' has stopped working. It's become something of a meme in investor circles, because every dip has only led to another. Liquidity has dried up, risk-taking has slowed, and there's a clear lack of direction in the market. This is the kind of market where even experienced investors are asking, what now? Patience is being tested across a broad level, and right now, the smartest move will be to not react emotionally," said Kresha Gupta, Director & Founder, Steptrade Share Services -- an investment firm.

Until morning, all 50 constituents of the Nifty were trading deep in the red, with Trent leading the losses, plunging 15 per cent. It was followed by other Tata Group stocks—Tata Steel and Tata Motors—which fell 10 per cent and 8.4 per cent, respectively.

Realty stocks also faced a steep fall, closing 6-8 per cent lower.

"There's no doubt that the recent escalation in tariffs, led by Trump, has played a central role in triggering global panic. He has consistently framed them as a correction to years of unfair trade, and his position remains firm that the tariffs are here to stay, regardless of market reaction. It's important not to view this as a mere temporary dip, as the market is reacting to the broader implications of a global trade war. These reciprocal tariffs are being viewed as disruptions as they will impact market sentiment, fund flows, and overall profitability across economies. The sentiment has weakened sharply, and the fiscal positions of many economies could come under pressure if trade tensions persist," said Gupta

She added that while equity markets may begin to stabilize, the ripple effects of these policies, "particularly on currency volatility, investment flows, and global supply chains" will likely unfold over a more extended period.

Trent Limited, an Indian retail company part of the Tata Group, was the biggest loser by the time the market closed with share prices falling by 14.77 per cent. Nifty Metal was the worst sector with prices going down by 6.75 per cent.

Meanwhile, paring some of its intraday losses, the 30-share BSE Sensex was down 2.95% at 73,141.96 after falling by 2,222.73 points during Monday's trade. By around 3:15 p.m., it was on track to close 3.16% lower at 73,054.94, having declined by 2,309.75 points.

"India's move should be decisive: treat this as a catalyst, not a crisis. The Indian Government has an excellent opportunity to turn this situation around and bring stability to the turbulence that currently ails the markets. India holds substantial leverage with its booming digital economy and its strategic value in countering China. However, it must meet the U.S. in the middle and relook at the tariffs across the board, to cultivate excellent relations with one of the world's strongest economies. A phased reduction of barriers in areas such as tech and agriculture could unlock reciprocal U.S. concessions, greatly benefiting Indian exporters, and in turn, the overall economy," said Tarun Singh, Founder & MD, Highbrow Securities.