Equities Finally Succumb To US Tariffs 

Highlights
•  Pharma stocks crashed as Trump warns of 'never seen before' tariffs
•  Union Bank shares decline 8% after missing loan and deposit guidance
•  Bharat Forge shares fall 8% after Morgan Stanley downgrades, cuts price target by 15%
•  DMart shares fall 3% after analysts issued cautious outlooks for the stock.
•  Capital market stocks plunge up to 5% as tariffs reignite recession fears

The benchmark indices markets fell for a second consecutive session, weighed down by Trump's tariffs, as Nifty 50 fell below 23,000 and the Sensex witness an over 900 points fall.

For the week, the BSE Sensex and Nifty fell 2.6% each.

 

SECTORAL PERFORMANCE 
Most sectoral indices ended in the red, the pharma index slipped 4% after Trump hinted that pharmaceuticals too are under consideration for trade tariffs. 

Shares of metal companies posted losses due to concerns over global demand growth and the potential disruption to business activities across the globe.  The IT stocks extended losses on fears of an increasing chance of US recession, 

Top Gainers	% Change	Top Losers	% Change
NIFTY FINANCIAL SERVICES	0.20%	NIFTY METAL	-6.6%
NIFTY FMCG	0.04%	NIFTY PHARMA	-4.0%
		NIFTY OIL & GAS	-3.8%
		NIFTY REALTY	-3.6%
		NIFTY IT	-3.6%

The 10-year Indian government bond yields rallied in the first week of the financial year, as recession concerns due to tariffs by the US boosted expectations of monetary easing.

Economists predicting slowdown of 20 to 40 basis points this year for Indian economy due to the tariffs, which would prompt interest rate cuts by the RBI.

The 10-year benchmark gilts yield ended at 6.46% today, the lowest level since January 2022.  The yield declined 12 basis points this week, its biggest fall since January 2024. 

Tenure	Today	Previous
10-year Gilt	6.46%	6.50%
5-year gilt	6.30%	6.35%
5-year OIS	5.76%	5.80%

In a volatile session, the Indian rupee ended sharply off highs as oil companies bought dollar seeing the rapid fall. 

The rupee has been on a gaining spree due on falling dollar index and in-activity on RBI in FX market.  After appreciating by 2.4% in March, the rupee rose by 0.5% this week. The rupee traded positively also due to weakness in crude prices, which helped the domestic unit maintain its strength.

Crude oil prices fell to their lowest level since August 2021 as OPEC+ 's decision to increase output faster than previously announced, combined with a tariff announcement that dented the outlook.

Unit	Today	Previous
Dollar/Rupee	85.24	85.43
Dollar Index	101.86	101.80
1-year Dollar/rupee premium (%)	2.32%	2.25%

OUTLOOK
Equities to remain under pressure due to escalation of trade war. Post Indian market hours today, Dow Jones Industrial Average futures slipped 3.3% after China retaliated with new tariffs on US goods.

Government bond yields may ease further as investors flooded into bonds for safety. Investors expect a 25-basis-point rate cut at the RBI's monetary policy decision on April 9, and some also eye a change in policy stance and guidance on banking system liquidity.

The dollar/rupee is expected in the range of 84.50 to 85.50 as US dollar continues to weaken further on recession fear, amid absence of RBI’s dollar purchases. 

Key Events & Data Due Next Week

Economic Data:

• US March CPI data
• India March CPI data
• India March IIP data
• US March PPI data
• AMFI data 

Corporate Actions:

• BF Utilities to detail Jan-Mar Earnings

Policy:

• RBI MPC meeting outcome Apr 9
• US FOMC meeting minutes on Apr 9