Indian Stock Market Crashes Over 3,900 Points Amid Global Sell-Off; Rs 20 Lakh Crore Investor Wealth Wiped Out

New Delhi — Indian equity markets plunged sharply on Monday, mirroring a global sell-off triggered by escalating trade tensions between the United States and China. The benchmark Sensex crashed 3,939.68 points, or 5.22%, in early trade, settling at 71,425.01, while the Nifty 50 index tumbled 1,160.8 points, or 5.06%, to trade at 21,743.65.

The steep fall resulted in the erosion of investor wealth worth Rs 20.16 lakh crore in a matter of hours, marking one of the steepest single-day declines in recent years.

Global Sell-Off Deepens

The rout on Dalal Street was in line with broader declines across Asian markets. Hong Kong’s Hang Seng plummeted nearly 11%, Japan’s Nikkei 225 fell by 7%, while China’s Shanghai Composite and South Korea’s Kospi dropped over 6% and 5% respectively.

The dramatic fall follows losses from last week, where the Sensex had already slipped by over 2,000 points and Nifty shed more than 600 points amid rising market volatility.

Trigger: Trump’s Tariff Offensive and Global Trade War Fears

The primary catalyst for Monday’s crash was U.S. President Donald Trump’s announcement of sweeping tariffs on a wide range of imports, igniting fears of a renewed and intensified global trade war.

In a retaliatory move, China announced a 34% tariff on all U.S. goods effective April 10, adding fuel to the already panicked investor sentiment. The tit-for-tat strategy between the world’s largest economies has amplified fears of prolonged economic disruption, with ripple effects now seen across emerging markets like India.

Analysts Warn of Continued Volatility

Market experts have urged caution, noting that uncertainty over trade policies, currency movements, and inflationary pressures could continue to weigh on market performance.

“Reciprocal tariffs, even if temporary, highlight the increased uncertainty for companies and investors,” said Sanjeev Prasad, analyst at Kotak Institutional Equities, in remarks quoted by Reuters.

Prasad added that the direction of Indian markets in the near term would heavily depend on how the U.S.-China trade dispute unfolds and the behaviour of domestic retail and institutional investors.

‘Wait and Watch’ Approach Advised

VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, described the current phase as one of “extreme uncertainty,” driven by geopolitical tensions.

“No one has a clue about how this turbulence caused by Trump’s tariffs will evolve. Wait and watch would be the best strategy in this turbulent phase of the market,” he told PTI.

What’s Next for Indian Markets?

With global cues driving sentiment and foreign institutional investors (FIIs) pulling out funds, the Indian market remains vulnerable to further declines. Domestically, all eyes are now on earnings season, upcoming policy announcements, and central bank cues for signs of stability.

Until then, analysts say investors should brace for continued volatility and avoid hasty decisions during this period of heightened market anxiety.