Market panic over Trump tariffs: Why long-term investors in Sensex, Nifty must stay calm

Indian equity markets nosedived on April 7 (Monday), mirroring global sell-offs as fears of a worldwide recession escalated after US President Donald Trump imposed a fresh round of tariffs. The Sensex and Nifty recorded their steepest one-day falls in 10 months, with the Nifty briefly plummeting over 5% at the open before trimming losses.

Times of India reported that the investors lost a staggering ₹14 lakh crore in market capitalisation, marking one of the sharpest value erosions in recent years. But while the volatility is real, experts urge caution—not capitulation.

Also read: Trump in China shop smashes ceramics of stock markets; Bears tame bulls with tight hug | Opinion

What triggered the market crash?

Markets worldwide were rattled by the sudden reimposition of reciprocal tariffs by Donald Trump, targeting major economies like China and the EU. This reignited fears of a global trade war, especially after China retaliated with export controls on rare metals.

Indian markets followed suit:

• Nifty50 dropped 1,150 points (5%) at open—the worst since March 2020.
• It ended the session 726 points lower, closing at 22,178 (–3.2%).
• BSE market cap plunged by ₹14.09 lakh crore, wiping off gains of the past month.
• Metal stocks were hit hardest, with the index falling nearly 7% amid US-China trade jitters.
• IT stocks hit a new 52-week low, due to fears of US recession impacting tech demand.

5 reasons investors must stay grounded, not fearful

India’s direct exposure to US tariffs is limited: Unlike export-dependent nations like China, India has lower trade dependency on the US, cushioning it from the brunt of tariff actions. This reduces the systemic risk to India’s growth outlook.

Crude oil correction is a macro tailwind: Falling oil prices are a major positive for India’s current account, inflation, and fiscal deficit. Lower energy costs will directly improve corporate profitability and ease pressure on consumers.

Domestic inflation is cooling: Inflation trends remain under control, offering the RBI headroom to adjust policy if needed. A stable rate environment will continue to support credit growth and consumer demand.

Robust domestic investor flows are a buffer: Indian mutual funds and pension funds have consistently absorbed market shocks, deploying capital even during volatility. This shift in household savings towards equities has lent depth to Indian markets.

Strong monsoon forecast to boost rural recovery: Above-normal monsoon predictions are expected to revive rural income and consumption, benefiting sectors like FMCG, auto, agri-inputs, and discretionary spending.

Also read: 'No inflation!' Trump shrugs off market meltdown, pushes Fed to cut rates as China retaliates

Technical outlook: Where are the support and resistance zones

Support Zone: 21,750–21,700 is key. A break below 21,700 could trigger a fall to 21,300.

Resistance Levels: 22,300–22,500 near-term; meaningful recovery only above 23,800, according to Anand Rathi’s Jigar Patel.

Volatility ahead: Traders are advised to remain cautious, hedge positions, and avoid aggressive bets.

Expert view: Long-term story remains unshaken

Experts told The Times of India that despite short-term volatility, India's structural strength remains intact, with attractive valuations and solid macro fundamentals offering long-term opportunities across equities, gold, and broader asset classes.

Rahul Jain, Nuvama Wealth: “Correction has made valuations attractive. Equity and even gold are offering opportunities. Stick to asset allocation and stay invested.”

Siddhartha Khemka, Motilal Oswal: “Markets will remain volatile, but India's structural strength will prevail.”

Ajit Mishra, Religare Broking: “The fear of an escalated US-China trade war is real, but technical indicators suggest scope for consolidation and recovery.”

Narendra Solanki, Anand Rathi: “Nifty50 target remains 26,000 over 12 months. India's macro fundamentals and policy framework provide a strong floor.”

Also read: Is Donald Trump crashing global markets on purpose? What we know so far

Volatility is inevitable. Resilience is optional!

Corrections are uncomfortable, but not unusual. Long-term investors should view this episode as a healthy valuation reset, not an exit signal. India's structural growth, digital transformation, strong domestic demand, and investor maturity make it uniquely placed among emerging markets.

The message from experts is clear: don’t fear the noise—follow the signal.