Bloodbath On The Streets; Rupee, Bonds Reel 

Highlights
  •  Tariffs may drag US growth to near zero, several Fed rate cuts likely: Citi
  •  Metal, realty shares crash as Trump tariff fears rattle investors
  •  Nifty IT index at 52-week low on recession fears
  •  Oil marketing companies’ shares end off lows as crude oil tumbles to 4-year low
  •  India volatility index surges over 65% to 22.79 mark 

Indian equity markets tumbled on Monday, mirroring a global rout sparked by renewed trade tensions. The BSE Sensex nosedived 2,226 points to close at 73,137.90, while the Nifty 50 fell 742 points to 22,161.60 — both indices registering their steepest single-day fall since June 2024.

The sharp correction was part of a broader sell-off after US President Donald Trump said they are not backing down even as China retaliated with 34% tariffs. He told reporters that he did not want anything to go down, “but sometimes you have to take medicine to fix something”.

India VIX — the fear gauge — spiked 65.7% to 22.79, up from 13.76 on Friday, signalling heightened nervousness.

SECTORAL PERFORMANCE 
Losses were broad-based across sectors. The Nifty Metal index plunged 6.8%, with Tata Steel, JSW Steel, and Hindalco among the worst hit. Realty declined 5.7%, while PSU Banks, Auto, Energy, Media, and IT all shed between 3% and 4%. Mid- and small-cap stocks were also heavily sold, falling 3.6% and 3.8%, respectively.

Top Losers	% Change
NIFTY METAL	-6.8%
NIFTY REALTY	-5.7%
NIFTY MEDIA	-3.9%
NIFTY AUTO	-3.8%
NIFTY FINANCIAL SERVICES	-3.5%

Indian government bond yields rose as a broad sell-off across asset classes weighed on sentiment. The benchmark 10-year gilts yield climbed to 6.4836%, up from 6.4630% on Friday, driven by global trade concerns and profit-taking after last week’s rally. 

Despite the uptick, gains in yields remained capped due to investor caution ahead of the Reserve Bank of India’s policy decision due Wednesday. The 10-year yield had dropped 12 basis points last week — the sharpest weekly fall since January 2024 — on hopes of further monetary easing.

The weakening rupee and falling equities added pressure on bond prices, but the 10-year yield stayed below the 6.50% mark, reflecting hopes of dovish RBI action.

Overnight indexed swap rates also fell, reflecting rising expectations of accommodative policy. While a 25-basis-point rate cut is largely priced in, traders are anticipating stronger measures.

Tenure	Today	Previous
10-year Gilt	6.48%	6.46%
5-year gilt	6.33%	6.30%
5-year OIS	5.74%	5.76%

The Indian rupee registered its steepest single-day fall in almost three months, closing at 85.8350 against the US dollar — down 0.7% — as global risk aversion intensified. This marked the rupee’s worst performance since January 13.

The Chinese yuan weakened to a near four-month low, falling 0.4% to 7.3181, adding further pressure on the rupee amid concerns of capital outflows from Indian equities.

Volatility in the rupee’s near-term outlook spiked, hitting its highest level since August 2023.

Unit	Today	Previous
Dollar/Rupee	85.84	85.24
Dollar Index	102.83	102.77
1-year Dollar/rupee premium (%)	2.40%	2.32%

OUTLOOK
Concerns over a global slowdown and earnings pressure for exporters are likely to keep market sentiment fragile. Investors remain cautious as the US-China trade conflict unfolds.

With no sign of a softening stance from the White House and rising safe-haven demand, the rupee remains vulnerable. Defensive positioning continues to dominate currency markets, with gains seen in the Japanese yen and Swiss franc.

The dollar/rupee is expected to be in the range of 85.60 to 86.25 on Tuesday.

Key Events & Data Due Tuesday
Economic Data:
- Eurozone February retail sales data
- Japan March FX reserves data

Corporate Actions:
- Mazagon Dock Shipbuilders to consider dividend
- Transformers And Rectifiers (India) to consider financial results
- Paisalo Digital to consider fund raising
- Zee Media Corporation to consider fund-raising

Policy:
- Day 2 of RBI MPC meeting