Black Monday haunts stock markets, indices fall 3%

30-share BSE Sensex crashes 2,226.79 points or 2.95% to settle at 73,137.90; NSE Nifty tumbles 742.85 points or 3.24% to settle at 22,161.60

Indian stock markets were unsettled on Monday (April 7, 2025) owing to the uncertainties emanating from the trade war between the U.S. and China and the fear of recession looming large. 

Influenced by global cues, the markets which opened over 5% down from the previous close gradually recovered during the day with the frontline indices closing with a loss of 3% led by fall across the board. Small cap and midcap stocks witnessed more losses as compared with bluechip stocks.

Indian stock market crash updates on April 7, 2025

The S&P BSE Sensex closed with a loss of 2,227 points or 2.95% at 73,138 points led by Tata Steel which fell 7.73%, L&T down 5.78%, Tata Motors down 5.54% after news came in that its subsidiary Jaguar Land Rover (JLR) has halted exports to the US. Kotal Mahindra Bank was down 4.33% and M&M fell 4.11%, Infosys was down 3.75%.   

The NSE Nifty-50 index (Nifty) which recovered during the day closed at 22,162, down 743 points or 3.24%.

To keep Monday’s fall in perspective, this is not among the top five falls seen in the market. While COVID-19 related fall of 13.2% in March 2020 was the biggest ever, the fall that was triggered by the Harshad Mehta scam in April 1992 was second biggest at 12.7%. 

In May 2004 the Sensex fell 11.1% following the defeat of NDA in Lok Sabha election. The market fell 7.4% in January 2008 reacting to the Global Financial Crisis and in March 2002, it had tanked 4.13% when the Ketan Parekh scam broke out.

Devarsh Vakil, Head of Prime Research, HDFC Securities said “The benchmark Nifty index experienced exceptional volatility on Monday, opening with a dramatic 5% gap down due to negative global cues—marking the steepest opening decline since March 23, 2020.” 

“From the day’s low, the index demonstrated remarkable resilience, recovering more than 500 points to reach 22,254 by the close. Robust buying activity during the final trading hours. The intraday volatility [on the Nifty] reached an extraordinary 1,160 points, the highest since June 4, 2024,” he said.

“Investor confidence was severely shaken by several factors: growing global recession fears, heightened concerns about potential US tariff actions on Indian goods, and substantial selling pressure in frontline stocks ahead of the upcoming earnings season,” he said.

“Despite these challenges, Indian equities have demonstrated relative strength compared to other markets, largely based on optimism that the world’s fifth-largest economy will endure only minor setbacks rather than severe damage during Trump’s trade conflicts,” he added.

NSE cash market volumes increased by 20% compared to Friday’s figures, reflecting intensified trading activity during this volatile session. 

The Indian rupee also suffered significantly, closing at a multi-week low of 85.823 against the U.S. dollar—a substantial 38-paise decline. This represents the steepest drop since March 21st and reflects the mounting trade tensions and sharp equity market downturn.

The mid and small-cap segments mirrored the benchmark indices’ extreme intraday volatility. Following an early morning sell-off, these indices staged an impressive recovery. 

The Nifty Midcap 100 rebounded over 6% from its lows but still ended the day down 3.63%. Similarly, the Nifty Smallcap 100 bounced back by 7% but finished 3.88% lower than the previous close.

The broader market sentiment remained decidedly negative, with declining shares predominating for the second consecutive session. 

The BSE advance-decline ratio fell precipitously to 0.19, the lowest reading since February 11, 2025, indicating widespread selling pressure across the market.

From a sectoral perspective, all indices closed in negative territory. The metal, realty, media, and auto sectors bore the brunt of the aggressive selling, experiencing the most significant declines.

“Markets are still coming to terms with the new global tariff war. It is still not clear how the global business environment will evolve over the next few months and who will suffer and who will benefit,” Bino Pathiparampil, Head of Research, Elara Capital said. 

“This uncertainty is increasing the risk premiums in the market. As the story plays out over the next few weeks, we expect markets to stabilize and clear winners and losers will emerge,” he said.

Retail investors who had flocked into the market in large number from Covid time are believed to be worst hit by the market mayhem. Those who could not book profit and averaged during the period of correction since September 2024 to average the losses, seems to be impacted the most. 

Apurva Chaturvedi, Co-chairman, IMC Young Leaders Forum said, “The one thing that the global equity market does not like is uncertainty. As of today the level of uncertainty in this world is at its peak.”

“When there is no clarity on what the future holds investors like to cash out and keep the funds ready for deployment when levels of uncertainty reduces. And this is why the markets are in a free fall,” he added.

Retail participation has been a key support system driving positive trends in the stock market over the last five years. From four crore demat accounts in 2020 the number has gone up to 14 crore in 2024 with over 10 crore new investors joined the capital market during this period.

According to January 2025 data from AMFI a fall of 3.6% was witnessed in equity mutual fund inflows, totaling ₹39,687 crore. However, net investments stayed positive for 47 months.

The monthly systematic investment plan (SIP) inflows into MFs fell to a three-month low of ₹25,999 crore in February as market selloff intensified as per AMFI data indicating the nervousness of retail investors.

Published - April 07, 2025 04:47 pm IST