Stock Market Crash: Rs 14 lakh crore wiped out as Sensex nosedives 2,200 pts, Nifty below 22,200; 6 key factors that spooked investors today

Indian benchmark indices Sensex and Nifty fell sharply on Monday as fears of a global trade war and a potential recession in the U.S. triggered a widespread sell-off across global markets. The Sensex tanked 2,227 points, or 2.95%, to close at 73,137, while the Nifty50 dropped 742 points, or 3.24%, to settle at 22,161.

The sell-off was broad-based, with all sectoral indices ending in the red. Metal, realty, auto, financial, and IT stocks led the decline. The total market capitalisation of BSE-listed companies plunged by Rs 14 lakh crore, falling to Rs 389 lakh crore.

6 reasons why stock market crashed today:

1. Nasdaq enters bear market

The Nasdaq index officially entered a bear market on Friday, falling more than 20% from its recent peak. The decline followed U.S. President Donald Trump’s announcement of sweeping tariffs earlier in the week, which sparked fears of a global economic slowdown. The scale and scope of the tariffs surprised investors, triggering sharp selloffs across global markets.Federal Reserve Chair Jerome Powell said the tariffs were “larger than expected” and warned they could significantly impact both inflation and economic growth, adding to the uncertainty surrounding the U.S. economic outlook.

2. Global selloff

Indian equities mirrored sharp declines across global markets, with major Asian indices plunging across the board. Japan’s Nikkei dropped 7.7%, South Korea’s Kospi fell 5.6%, and China’s Shanghai Composite slid 7.3%. Hong Kong’s Hang Seng index tumbled over 13%.

U.S. futures also extended losses, with Nasdaq futures down 3.5% and S&P 500 futures falling 3.1%. In Europe, the pan-European STOXX 600 slumped 5.8%, marking its fourth straight session of losses and its steepest one-day fall since the COVID-19 pandemic.

3. Recession fears overshadow inflation worries

Market participants now believe that recession concerns outweigh short-term inflation risks. While U.S. consumer price index (CPI) data, due later this week, is expected to show a 0.3% increase for March, analysts fear that tariffs will soon drive up costs significantly across sectors — from groceries to automobiles.

These rising input costs are also expected to squeeze corporate profit margins, just as earnings season begins. Around 87% of U.S. companies are set to report results between April 11 and May 9, with major banks among the first to announce earnings.

4. Sharp plunge in global commodity prices

Global commodity prices tumbled amid mounting fears of weakening demand and a looming economic slowdown.

Brent crude fell 6.5%, WTI dropped 7.4%, while gold slipped 2.4% and silver plunged 7.3%. Base metals also saw steep declines, with copper down 6.5%, zinc 2%, and aluminium 3.2%, as escalating trade tensions and recession concerns rattled investor confidence.

5. Investors flee to safe havens

Investors rushed to safer assets amid growing fears of a global recession, further pressuring equity markets. The yield on the 10-year U.S. Treasury fell 8 basis points to 3.916% as demand for government bonds surged. Fed funds futures also spiked, pricing in an additional 25-basis-point rate cut by the U.S. Federal Reserve this year.

This flight to safety triggered broad-based selling in equities, as risk-off sentiment deepened across global markets. Despite Fed Chair Jerome Powell stating on Friday that the central bank is “in no hurry” to adjust policy, market expectations now reflect a 56% chance of a rate cut as early as May.

6. Escalating global trade war

Fears of a global trade war intensified after China announced retaliatory tariffs on a broad range of U.S. goods, following sweeping U.S. tariff hikes earlier in the week. The escalating tit-for-tat measures have raised concerns about a slowdown in global trade and economic growth.

Investors worry that prolonged trade tensions between the world’s two largest economies could disrupt supply chains, dampen corporate earnings, and further weaken already fragile global demand—contributing to the sharp selloff in equities worldwide.

“Global markets are experiencing heightened volatility driven by extreme uncertainty. No one has a clear sense of how this turbulence triggered by Trump’s tariffs will unfold. A ‘wait and watch’ approach may be the best strategy in this phase of market instability,” said Dr. V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.