Rs 26,96,135 Crore Wealth Erased Since Reciprocal Tariffs; Experts Reveal Investment Strategy To Sail In Chaos

Sensex, Nifty Crash: The Indian stock market crashed by more than 5% in the early trade of Monday, tracking the weak performance of global cues. Broad-based selling pressure led to a whopping Rs 19 lakh crore of domestic market rout on April 7th alone. However, Sensex and Nifty are down since April 3rd, after Trump's reciprocal tariffs came into effect. In the three consecutive losing streak, more than Rs 26 lakh crore of investors' wealth has been eroded so far. In such crashing moments, it is important to invest wisely!

Sensex touched an intraday low of 71,425.01, with decline of 3,939.68 points or 5.27%. BSE-listed companies' market value dropped to Rs 3,86,01,961 crore in the early hours.

Trading at Rs 1152.50 apiece with a 4.3% drop, the most valued stock Reliance lost Rs 69,488.73 crore m-cap to Rs 15,60,756.23 crore from previous session's m-cap of Rs 16,30,244.96 crore.

HDFC Bank, the largest banker and second largest company of India, tumbled by 3.6% to Rs 1751.05 apiece at the time of writing. This led its market cap to Rs 13,39,942.28 crore, down by Rs 50,466.4 crore from Rs 13,90,408.68 crore of the previous session.

Tata Group-backed TCS, which is the largest IT company but also the third largest company of India, plunged by 4.1% to trade at Rs 3164.20 apiece. Its market cap was at Rs 11,44,437.26 crore, down by Rs 49,332.63 crore from previous session's Rs 11,93,769.89 crore.

These three are the largest companies of BSE and NSE and hold the strongest weightage on Sensex and Nifty.

Due to a three-day selloff in a row, Sensex plummeted by 5,167.5 points and Nifty toppled by 1,573.95 points from April 3-4. The last green mark on benchmarks was 76,617.44 and 23,332.35, and that was on April 2nd.

The downside comes right after Trump's April 2nd Liberation Day where he imposed reciprocal tariffs on about 150 countries. India faced a 26% reciprocal tariff, however, its impact is seen to be limited unlike other Western countries and China. But trade war and recession tensions have soured investors' sentiment.

On April 2nd, the market cap of BSE-listed companies stood at Rs 4,12,98,095.60 crore, which declined by Rs 35,170.32 crore on April 3 to Rs 4,13,33,265.92 crore, and further down to Rs 4,03,34,886.46 crore on April 4th. Taking into consideration the April 7th market cap mentioned above, BSE-listed companies' valuation is down by Rs 26,96,134.6 crore from Liberation Day.

Not just that about Rs 45.57 lakh crore of investors' wealth has been eroded in BSE since January 20th level where m-cap was at Rs 4,31,59,726 crore. Trump took the reigns of the White House on January 20th.

That being said, how should investors strategize their portfolio to sail through a market crash:

Pranay Aggarwal - Director & CEO of Stoxkart said, Black Monday has shaken Indian markets, but investors and traders must stay calm. Investors should avoid panic selling, continue SIPs, and consider buying quality stocks at discounted prices. Review portfolios and maintain diversification.

Aggarwal added, that traders must prioritize capital preservation, stick to their trading plans, and avoid overtrading. Volatility brings opportunity, but only with strong risk management. Use proper stop-losses and position sizing. Monitor global cues like the US markets and crude. Remember, "This too shall pass." Focus on process over profit, and don't hesitate to lean on trusted communities or analysts for clarity during uncertain times. Stay disciplined and strategic.

Meanwhile, brokerage Axis Securities in its report said, "As the tariffs imposed on other countries are higher than market expectations, global market volatility is expected to rise. Additionally, these tariffs are inflationary, posing a challenge for the US FED in its upcoming policy decisions. The evolution of the ecosystem needs to be closely monitored over the next few weeks. These developments are negative for global growth, and disruptions in the global supply chain could escalate recessionary risks in the US market going forward."

Hence, more bears ahead.

Given the significant weightage of the US in the global economy and equity markets, these developments are likely to heighten volatility in the near term, impacting investor sentiment globally, Axis Securities said, "We recommend increasing cash positions by up to 10% in the short term and utilising any market dips in a phased manner to build positions in high-quality companies with strong earnings visibility, maintaining an investment horizon of 12-18 months."

The domestic economy looks attractive at the current juncture, as per Axis.

A series of domestic fundamentals that could influence sentiment in Sensex and Nifty, as per Axis are --- e 1) A 50bps CRR cut by the RBI in Dec'24, 2) Consumption boost in the Union Budget, 3) A 25bps Rate cut by the RBI in Feb'25 MPC, and 4) Improved liquidity measures by the RBI. These events indicate better days ahead in FY26, with improved credit growth and overall consumption improvements.

These developments are expected to bring better days in FY26 over FY25.