Trump Speech: The Indian stock market witnessed a sharp sell-off on Thursday, April 2, after U.S. President Donald Trump’s address failed to provide any clarity on easing tensions in the Middle East, triggering risk-off sentiment globally.
Benchmark indices in intra-day trade, with the Sensex falling more than 1,500 points to an intraday low of 71,546, while the Nifty 50 dropped nearly 500 points to 22,183.
The sell-off came after Trump signalled that the United States would continue its military campaign against Iran for the next few weeks, raising fears of prolonged geopolitical instability. His comments led to a surge in oil prices and strength in the dollar and bond yields, further pressuring equities.
How much can Nifty fall after Trump’s speech?
Market experts believe the Nifty’s near-term trajectory will depend on whether key support levels hold amid elevated global uncertainty.
According to Bajaj Broking, holding above 22,300 could lead to consolidation in the 22,300–22,900 range, while a failure to sustain these levels may extend the decline towards the 22,100–21,800 zone, which remains a crucial support area.
The brokerage said, “Holding above 22,300 can lead to some consolidation in the range of 22,300-22,900. Failure to do so will signal extension of the decline towards the key support area of 22,100-21,800. For any meaningful pause in the overall downtrend, the index needs to start forming higher highs and higher lows on the daily chart on a sustained basis, along with a close above the previous week’s high of 23,465.”
It further noted that the 22,100–21,800 band is a strong support zone, as it coincides with a long-term trendline connecting the last two-year lows along with the 200-week EMA.
Analysts also highlighted that global cues, especially developments around the Strait of Hormuz, remain critical for market direction.
Vikram Kasat, Head – Advisory, PL Capital, said, “remained primarily focused on the fate of the Strait of Hormuz. Any cessation of outright warfare would be a good thing—hopefully no one wants to see casualties and major disruptions—but the notion that it might occur without a reopening of the seemed rather incomplete. A ceasefire is a necessary condition for a resolution; reopening the Strait is the only condition sufficient to return global economies to a state of relative normalcy.”
He added that sentiment would improve only if the Nifty reclaims key levels, with 22,150 seen as important for stability, while 23,480 remains a crucial resistance and breakout level. Immediate support is placed at 22,450, and a break below 22,280 could trigger further downside pressure.
Nifty 50 targets
On the fundamental side, global brokerages have turned cautious on Indian equities amid rising energy risks.
Goldman Sachs said, “Our commodity analysts have raised their oil and gas price forecasts due to a longer impairment of Strait of Hormuz flows. Reflecting India’s greater vulnerability to the energy shock.”
The brokerage had earlier cut its 12-month to 25,900 from 29,300 and downgraded Indian equities to ‘marketweight’ from ‘overweight’, citing a weaker risk-reward outlook.
Meanwhile, Citi also lowered its Nifty target to 27,000 from 28,500, implying about 17% upside from the last close, and reduced valuation multiples. The brokerage estimated that prolonged supply disruptions could impact India’s macroeconomic stability, including growth, inflation, fiscal deficit, and current account balance.
With geopolitical tensions, rising oil prices, and cautious global cues dominating sentiment, analysts believe the Nifty could remain volatile, with downside risks persisting if key support levels fail to hold.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.