Indian Stock Market Falls as US Tariffs on China Shake Global Markets (April 9, 2025)

On 9 April 2025, the Indian stock market experienced a downturn, reversing the gains from the previous session. The decline was primarily driven by escalating global trade tensions and the implementation of new U.S. tariffs of 104% on China, effective from today.

The Sensex opened at 74,103.83, slipping 0.51% to close at 73,847.15, while the Nifty 50 declined 0.61% to finish the day at 22,399.15.

• Nifty 50 is down 0.61%
• Sensex is down 0.51%
• Bank Nifty is down 0.54%
• Nifty IT is down 2.19%

You can track the daily market activity on Ticker's Market Section. 

Sizable advances were made in NIFTY FMCG and NIFTY NEXT 50, with major declines in the IT, PSU Banks, MIDCAP, and SMALLCAP segments.

Key Reasons Behind Today's Market Movement

1. Global Market Cues

Global markets played a crucial role in shaping today's positive momentum:

• US Markets: The introduction of a 104% tariff on Chinese imports by President Donald Trump led to significant declines across major indices. The Dow Jones Industrial Average and the S&P 500 both registered losses exceeding 1%.​
  
  - Dow Jones: 37,645.59 (-0.84%)
  - Nasdaq: 15,267.91 (-2.15%)
   
• Asian Markets: The ripple effects of the U.S. tariffs were felt across Asia, with Japan's Nikkei 225 and Hong Kong's Hang Seng Index both closing lower.
  
  - Nikkei: 31,884.53 (-3.42%)
  - Hang Seng: 19,806.44 (-1.60%)
  - Shanghai Composite: 3,524.57 (0.24%)

2. FII & DII Activity (8th April 2025)

FIIs: Net sellers, withdrawing ₹4,994.24 Cr.
DIIs: Net buyers, investing ₹3,097.24 Cr.

Did you know you can find out where FIIs or DIIs are increasing holdings using Ticker's Stock Screener for free. Just paste the query DII Holding Q1 >DII Holding Q2 in the screener and get a list of stocks where DII have increased their holdings compared to the previous quarter. 

3. Sectoral & Stock Performance

Top Performing Sectors

• FMCG Sector - The FMCG sector outperformed due to its defensive nature, attracting investors seeking stability amid market volatility. Additionally, easing inflationary pressures improved consumer spending prospects, improving the sector's outlook.
   
• PSU Banks - Public sector banks witnessed a sharp decline as investor sentiment turned cautious despite the RBI's rate cut, which was interpreted as a signal of underlying economic weakness.
   
• IT Sector - The IT sector faced significant losses as escalating U.S. tariffs heightened fears of a global economic slowdown, potentially reducing client spending on technology services.

Top Gainers & Losers

From the Nifty 200 index, here is the list of top gainers and losers among stocks.

Get the updated stocks daily on ticker. 

4. Macro & Economic Factors Impacting the Market

• Rupee Gains Against USD: The Indian Rupee opened stronger at ₹86.56 against the US Dollar and appreciated further to ₹85.98 in afternoon trade, gaining 0.14% or 0.121 paise from the previous close.

• Volatility Rises on Trade Tensions: Market volatility surged to a near two-year high following escalating US-China tariff threats. President Trump’s comments on higher levies triggered risk-off sentiment.

5. Market Sentiment & Key Triggers

• RBI Monetary Policy Adjustments

1. Repo Rate Reduction: The Reserve Bank of India lowered the repo rate by 25 basis points to 6%, the second consecutive cut intended to boost growth as global trade tensions rise.
    
2. Inflation Forecast: The RBI reduced its inflation forecast for FY2025- 26 from 4.2% to 4%. This adjustment is due to a more favourable outlook on food prices.
    
3. GDP Growth Forecast: The central bank lowered its GDP growth projection for FY2025- 26 from 6.7% to 6.5% in response to uncertainties regarding recent global trade developments.
    
4. Policy Position: In addition to changing the repo rate and forecasts, the RBI also changed its policy stance from 'neutral' to 'accommodative,' suggesting that more actions can be taken shortly, if necessary, to achieve economic growth.

• USA - China Trade War

1. Global Trade Tensions: The implementation of substantial U.S. tariffs on Chinese imports has heightened fears of a global economic slowdown, impacting investor sentiment worldwide. China is responding with an additional 84% tariff on US Imports effective 10 April 2025. 

Conclusion & Investment Strategy

Global cues, especially the increase of trade tensions following new U.S. tariffs, weighed on the Indian stock market on 9 April 2025. While certain sectors, such as consumer goods, showed relative strength, investors were unable to shake off the gap-down effect caused by the bearish sentiment.

From Finology Research Desk:

Considering the RBI's dovish stance and macroeconomic developments, investors should focus on quality rather than momentum.

With inflation moderating and monetary policy becoming accommodative, sectors sensitive to interest rates (banking, auto, realty) may be beneficiaries in the medium term. However, the downgrade in GDP forecasts suggests a slower economic momentum and requires a selective and defensive stance.