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Trade war and U.S. recession fears spur benchmarks to

worst

session in 10 months

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Mid & smallcaps down 20% and 23.6% from all-time highs

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About 87% of NSE-listed stocks decline

By Bharath Rajeswaran and Shubham Batra

April 7 (Reuters) -

India's stock benchmarks clocked their worst session in 10

months on Monday as a tariff-fueled selloff intensified and

investors dumped riskier assets on growing fears of a global

recession.

The Nifty 50 lost 3.24% to 22,161.1 while the BSE

Sensex fell 2.95% to 73,137.9. Both benchmarks posted

their worst single-day decline since June 4, 2024.

Other global markets slumped, with the MSCI Asia

ex-Japan index losing 8.3%. Japan's Nikkei 225

dropped 7.8%, while European stocks plunged with

Germany's Dax falling 5.3% and the British FTSE

shedding 4.1%.

President Donald Trump's new tariffs are "larger than

expected" and are likely to impact inflation and growth, Federal

Reserve Chair Jerome Powell said on Friday, flagging an

uncertain outlook for the U.S. economy.

S&P 500 futures slid nearly 5% in volatile trade on

Monday, while Nasdaq futures dived 5.7%, adding to last

week's almost $6 trillion in market losses.

The Nifty volatility index - or the fear index -

rose 66%, the most in a session in 10 years to 22.79, and the

highest since June 5, 2024.

"The sell-off on Monday is sentiment-driven, exacerbated by

fears of a prolonged trade war and global liquidity tightening,"

said Jaspreet Singh Arora, CIO at Equentis Wealth Advisory

Services.

IT and export-driven sectors may stay under pressure in the

near term due to trade tensions, Arora said.

Analysts cautioned that declining returns and increased

volatility could diminish the appeal of domestic equities.

Multiple brokerages also expect a downside risk to India's

fiscal year 2026 GDP growth due to the tariffs.

However, India does not see any hit to projected growth for

the fiscal, government officials said on Monday.

All 13 major sectors declined on the day.

IT companies, which earn a significant share

of their revenue from the U.S., lost 2.5%.

With tariffs and trade wars, some of the discretionary

spending in IT could get pushed out, triggering a fall in the

sector, said Shibani Kurian, senior fund manager and head of

equity research at Kotak Mutual Fund, told Reuters Trading

India.

Metals dropped 6.75%, while financials

shed 3.5%.

Private lenders HDFC Bank, ICICI Bank

and oil-to-telecom conglomerate Reliance Industries -

the three heaviest stocks that have a 32% weightage in the Nifty

50 - lost about 3.5% each.

The broader small-caps and mid-caps

fell 3.9% and 3.6%, respectively, their worst

session in nearly three months.

Among stocks, retailer Trent tumbled 15% on

slowing revenue growth, while Tata Motors slid 5.6%

after its luxury arm Jaguar Land Rover paused exports to the

U.S.