April 2 showdown: A 48-hour stock market strategy to get ‘liberation’ from Trump’s tariff pain

The US President Donald Trump‘s “Liberation Day” is here, a day where he seeks to alter the global trade structures by imposing reciprocal tariffs on countries that, according to him, treated the US unfairly. This will have widespread implications for the world including India.

Even though experts predict the impact will be minimal and transient, the domestic stock market doesn’t seem to think so. Benchmark Sensex plummeted 1400 points on Tuesday, highlighting the deep fears pervading among investors. In this context, here is a study on how investors should approach the next two days of trading.

The Tuesday fall: Did investors celebrate too early about the rebound?

The answer is yes and no. Prior to Tuesday, the stock market rebounded sharply in the month of March from the depths of 6-month correction. This was driven mostly by foreign investors’ return to Indian markets. Back then, experts said the markets may not have factored in the news of tariffs.But Tuesday changed it all as the fall was very sharp. Priyank Upadhyay of SSJ Finance and Securities says this shows the nervousness in the market.

Nifty peaked around in the month of September 2024 around 26,200 and from there corrected around 19% and formed a low around 22,000 in the month of March 2025 and from there have recovered towards 23,800 mark.

A 1,400-point drop may indicate that traders and funds have squared off positions in anticipation of key developments. Experts say the broader market trend remains intact, and investors should not view this as a structural issue.

“The market correction appears to be profit booking ahead of an important event tomorrow,” said Shruti Jain, Chief Strategy Officer, Arihant Capital Markets.

Investor strategy for next 2 days in Nifty

Analysts say Tuesday’s correction has stalled in the support zone of 38.2% (23,275) to 50% (23,090) retracement mark of the recent rise.

“We are of the view that the market should stabilize around the 23,000/22,800 support zone and again move higher towards the recent swing high of 23,800. On the flip side, close below 22,300 would turn the structure neutral,” Priyank Upadhyay, VP – Research, SSJ Finance and Securities.

For Sensex, Kunal Kamble, Sr Technical Research Analyst at Bonanza Group said 74,860 will be a crucial level to watch on the downside.

“A breach of this level could trigger sharp selling towards 73,600. On the upside, if the market reacts positively, 77,760 will act as a resistance level. A closing above this level could lead to further upside towards 81,000–82,400.”

Expiry day strategy

Given the ongoing global uncertainties and pre-event jitters, market volatility is expected to remain high on expiry day. Sectors that are directly impacted by tariffs, such as IT, export-driven businesses, and certain industrials, may see the most action.

“Nifty has good support around 23,000/22,800 if we see this zone because of volatility on trump tariff we expect these levels to hold as put writes will protest the zone of 23,000/22,800 zone. So one needs a bullish strategy in this support zone of 23,000/22,800 zone,” said Upadhyay.

Stocks to avoid in the next few days

IT, pharma and auto stocks have all featured that might face headwinds in the near term due to trade concerns and are best avoided until clarity emerges. Investors should focus on fundamentally strong sectors while navigating this volatile phase.

Key levels to watch out for

For Sensex, key levels to watch out include 74,860 on the downside and 77,760 on the upside. For Nifty, it would be 23,000 on the downside and 23,800 on the upside.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)