Stock Market Crash After Trump's Tariff War; Will Sensex, Nifty Rise Or Fall On Tuesday, February 4, 2025?

Stock Market Crash: Sensex and Nifty witnessed massive selling pressure on Monday after Trump's tariff plans created an outrage between Mexico, Canada and China. Sensex and Nifty both fell by more than 1%. Also, India's volatility index rose by 2%, signalling heightened market uncertainty ahead. The immediate support for Nifty is now seen between 23,180 to Rs 23,000 on the downside, while there is the potential of a 23,800 to 24,000 range upside.

Sensex, Nifty:

Broad-based selloff pushed Sensex down by 319.22 points or 0.41% to close at 77,186.74 after hitting an intraday low of 76,756.09. YTD, Sensex is down by 2%.

Meanwhile, Nifty closed at 23,361.05, down by 121.10 points or 0.52% after hitting an intraday low of 23,222. YTD, the index is also down by 2%.

Explaining the latest performance, Vinod Nair, Head of Research, Geojit Financial Services said, the global market got unsettled amid the onset of the 'Trade War,' as tariff conflicts between the US and other nations are unlikely to yield any economic benefits. Instead, it may cause challenges to the global economy, heightening global financial risks. International trade, which had flourished under the framework of globalisation, now faces threats from the new protectionist policies.

Nair added front and contour tariffs are expected to make the world less efficient and elevate global inflation & interest rates."

Will Sensex and Nifty surge or crash on Tuesday, February 4, 2025?

Hardik Matalia, Derivative analyst at Choice Broking said, despite briefly breaching its intraday support at 23,260, the Nifty managed to close above 23,300, forming a bullish hammer candle on the daily chart, signalling a potential reversal in sentiment. If the index sustains above the 23,500 level, it may witness an upward move toward the 23,800-24,000 range. On the downside, immediate support is seen at 23,180 and 23,000, levels that could present attractive buying opportunities for traders.

Giving a technical outlook, Shrikant Chouhan, Head of Equity Research, at Kotak Securities said, "In the backdrop of weak global sentiment, our market opened with a gap down but found support near the 20-day SMA (Simple Moving Average) and reversed. We believe that the current market texture is volatile and non-directional; hence, level-based trading would be the ideal strategy."

Further, to traders, Ajit Mishra - SVP, Research, Religare Broking said, concerns over Trump's tariff announcements overshadowed the budget's impact, pushing the index toward its 20-week EMA, signaling caution amid consolidation. This phase may continue, with global cues, corporate earnings, and the upcoming MPC meeting playing a key role in market direction. Investors are advised to remain cautious and manage positions on both sides.

Also, Chouhan added, for day traders, the 20-day SMA, along with support levels of 23,270/77,000 and 23,220/76,800, would act as key support zones, while resistance areas for the bulls are around 23,500/77,500 and 23,550/77,800. However, if the market dips below 23,220/76,800, it may retest the levels of 23,100/76,500.