Indian Stock Market Crash: BSE Sensex Dropped Over 5%, ₹16.19 Lakh Crore Investors’ Wealth Eroded

On Monday, April 7, 2025, the Indian benchmark index BSE Sensex plunged over 5% in the morning trade following a global rout pushed by reciprocal tariffs announced by the US and China’s retaliatory measures. Additionally, concerns over a potential recession in the US, the world’s largest economy, dampened investor sentiment globally. Investor wealth, amounting to ₹16.19 lakh crore, was wiped out within hours during the April 7 trading session.

All 30 Stocks on BSE Sensex were in Red

BSE Sensex plummeted by 3,939.68 points, or 5.22%, hitting an intraday low of 71,425.01— marking its worst opening since March 2020, during the peak of the COVID-19 pandemic. This indicated the sharpest single-day decline since June 4, 2024, when the indices had dropped over 8%.

All 30 stocks in the Sensex were in the red, with Tata Steel leading the decline, dropping more than 10 percent, followed by Tata Motors, which fell over 9 percent. Other major stocks, such as Infosys, HCL Tech, Tech Mahindra, Reliance Industries, TCS, and L&T, also saw significant losses.

Key Factors Behind the Market Collapse

1. Escalating Tariff Tensions: The latest round of tariff hikes by US President Donald Trump, along with China’s retaliatory actions, sent shockwaves through global markets. Trump defended the tariffs, claiming that countries were eager to strike a deal, dismissing market pain as temporary. He remarked, “Sometimes you have to take medicine to fix something.”
2. Rising Recession Fears: Goldman Sachs revised its forecast, increasing the likelihood of a US recession to 45 percent over the next 12 months, up from its previous estimate of 35%. JPMorgan Chase went further, suggesting that the US economy might enter a recession this year.
3. Global Sell-off Impact: Equity markets across Asia mirrored the turmoil on Wall Street. Hong Kong’s Hang Seng plunged nearly 11%, Japan’s Nikkei 225 dropped 7%, Shanghai Composite lost over 6%, and South Korea’s Kospi fell 5%. Japanese stock futures were briefly halted after hitting lower circuit limits in early trading.On Wall Street, the S&P 500 dropped 5.97%, Nasdaq fell 5.82 %, and the Dow Jones Industrial Average declined 5.50 % on Friday.
4. Surge in India VIX: The India VIX, a measure of market volatility, soared by 57 % to 21.62 on Monday, reflecting heightened investor uncertainty and risk in the short term.

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