The Indian stock markets have been experiencing turbulence in recent times, driven by a combination of domestic and global factors. Since April 2, the BSE benchmark gauge has slumped 1,460.18 points or 1.90 per cent. The market capitalisation of BSE-listed firms has tumbled by Rs 11,30,627.09 crore to Rs 4,01,67,468.51 crore (USD 4.66 trillion). The benchmark indices have jumped nearly 2 per cent on Friday as investors rejoiced at the 90-day suspension of additional import duties by the US.

Global Uncertainty: A Trigger for Market Turmoil

The recent turmoil in the Indian stock markets can be attributed to the growing concerns of a tit-for-tat trade war between China and the US. The White House announced a 90-day pause on “reciprocal tariffs” for most countries except China, which in turn decided to impose 125 per cent tariffs on US imports. China retaliated with its own additional tariffs on US goods, escalating the situation.

• The US, on April 2, announced an additional 26 per cent tariff on Indian goods entering the US.
• The Trump administration announced the suspension of these tariffs for 90 days until July 9 this year.
• However, the 10 per cent baseline tariff imposed on the countries will continue to remain in place.

Market Participants’ Fears and Expectations

Market participants fear that tensions between the world’s two largest economies could cause widespread global damage. Vishnu Kant Upadhyay, AVP – Research & Advisory at Master Capital Services, said that the Indian markets have indeed experienced turbulence in recent times, driven by a combination of domestic and global factors. However, global uncertainty is the major fear of market participants, which can be a big force in deciding the trend and trajectory in the near term.

1. Indian equity markets are navigating a complex landscape which is shaped by global uncertainties and potential shifts in US trade policy.
2. Despite the steep correction that took off during the end of the previous year, participants are optimistic that the market could rebound in the second half of FY26.
3. However, the present phase of uncertainty may last for another three to six months specifically because of fear of a US slowdown and recession that is stifling investor sentiment.

Impact on Indian Economy

India’s economy is well-placed to grow but global market uncertainties, volatility and trade disruptions are still major risks. Sustained policy support and domestic resilience will be essential in maintaining economic momentum, especially to protect and support Indian industries and economy from the US tariffs and potential trade wars.

“Markets had a rocky start to the new fiscal year after Trump announced sweeping reciprocal tariffs on the world. Global markets witnessed sharp losses, and India also was not immune to the sell-off but fared relatively better so far,”
— Satish Chandra Aluri, Analyst at Lemonn Markets Desk.