stock market crash: Donzilla crushes markets: Amid global carnage, D-Street caps fall at 3%

Markets crashed and burned across Asia and Europe as the trade war begun by US President Donald Trump detonated with devastating consequences for investors. US stocks, however, opened to sharp volatility, shifting from red to green and back within minutes. With S&P heading towards a bear market at press time, this is being seen as its worst three days since Black Monday in 1987.

Stocks in China and Hong Kong plunged 7.3% and 13.2%, respectively, as Beijing announced tariff retaliation. Japan tumbled 7.8%, South Korea dropped 5.6% and Taiwan slumped nearly 10%. China and Hong Kong had resumed trading on Monday after a holiday.

India wasn’t spared, although it was relatively better off with about 3% decline. The Dow Jones index was down over 2% at press time. The FTSE ended 4.4% down, and the Europe Stoxx 600 fell over 4.5%.

Oil prices tumbled, with Brent crude sliding to a four-year low before recovering. Gold was down almost 3% on the day, at ₹88,401 per 10 gm in the domestic physical market.

The rupee weakened 60 paise—its steepest single-day decline in three months—to close at 85.83 per dollar, in line with the fall in other Asian currencies. The drop in oil prices and likely central bank intervention cushioned the rupee’s fall.
The fall in India’s benchmark stock indices—the steepest in a day in 10 months—was precipitated by margin calls after panic pushed traders to rush to wind up leveraged bets in a global flight to safety.

The BSE Sensex dropped 2,227 points, or 2.95%, to 73,137.90. The NSE Nifty fell 743 points, or 3.2%, to 22,161.60. Both indices had cratered over 5% earlier in the day.

US Inc Voices Fears
The selloff caused India’s market cap to erode by ₹14.09 lakh crore after shedding ₹10 lakh crore on Friday.

The nervous mood on Dalal Street was reflected in the Volatility Index, the market’s fear gauge, soaring nearly 66% on Monday, its highest ever advance in a trading session, suggesting traders anticipate more chaos in the near future.

US futures plunged on Monday, pointing to the likelihood of the sharpest three-day declines since 1987, after Trump said over the weekend that tariffs on imports into the US would be implemented as planned, while downplaying recession fears.

Trump’s stance prompted American business leaders such as JPMorgan Chase chief executive Jamie Dimon and billionaire hedge fund manager Bill Ackman, a backer of Trump, to voice their fears about the adverse effects of the tariffs. While Dimon warned of lasting negative consequences, Ackman urged the US president to pause the tariffs, or risk “a self-induced, economic nuclear winter.”

“The steep decline in the US on Friday has trickled down to Indian markets as well, which is driving traders to cut positions,” said Lakshmi Iyer, chief executive, investment and strategy, at Kotak Alternate Asset Managers. “This may have also prompted margin calls, and that could have dragged the markets lower.”

Iyer didn’t rule out a further 3-5% decline in the markets and said the downtrend may linger for a while, creating opportunities for staggered purchases of equities.

Thailand, which was closed for trading on Monday, said it would ban short selling and impose trading curbs until April 11 to curb volatility. The market will resume trading on Tuesday.

At home, the pessimism rubbed off on the broader market as well, with the mid-cap, small-cap and micro-cap indices shedding 3-4% each. Of the 3,036 stocks traded on the BSE, 2,640 declined, while 327 advanced. “We believe the markets are going to be choppy over the next few days as we do not know the final outcomes of the impositions of tariffs,” said Ashish Gupta, chief investment officer at Axis Mutual Fund.