Investor sentiment remained cautious amid concerns over U.S. President Donald Trump's push for sweeping reciprocal tariffs.

The BSE Sensex dropped 1,390 points, or 1.8%, to 76,024, while the NSE Nifty slipped 354 points, or 1.5%, to 23,165.

Barring Oil & Gas, all major sectors ended in the red, with Nifty Bank, IT, Realty, Financial, and Consumer Durables declining 2-3.5%.

The total market capitalisation of BSE-listed companies fell by Rs 3.23 lakh crore to Rs 409.64 lakh crore.

Why the market fell today?

1) Global jitters over Trump’s tariff plan

Investors are on edge ahead of April 2, which Trump has called "Liberation Day," when he is expected to announce broad-based reciprocal tariffs. Over the weekend, Trump hinted that these tariffs would target all countries, not just those with large trade imbalances, raising fears of a global trade war that could slow economic growth.

"Globally markets are focused on the details of Trump’s reciprocal tariffs to be announced tomorrow. The market trends after the announcements will depend on the details of the tariffs and how they will impact different countries and sectors," said Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

2) IT stocks under pressure

IT companies, heavily reliant on the U.S. market, fell up to 5% amid concerns over weaker demand. The sector has already lost 15% in the March quarter, dragging the Nifty 50 lower.

"We expect the FY26 revenue outlook for IT firms to be in-line to disappointing, and downside risks to earnings remain," Morgan Stanley analysts noted.

3) Oil prices near five-week high

Crude oil prices hovered near a five-week high, raising inflation concerns. Brent crude was around $74.67 per barrel, while U.S. West Texas Intermediate (WTI) traded at $71.37. Higher oil prices could pressure India's fiscal deficit and corporate margins.

4) Profit booking after a strong rally

The Nifty and Sensex had gained nearly 5.4% over the past eight sessions, turning positive for the year. Investors appear to be booking profits after the recent rally, leading to a market pullback. The sharp rise in valuations over a short period has also made some traders cautious, prompting a sell-off in heavyweight stocks.

"India outperformed most markets in March with 6.3% return. FIIs turning buyers and the consequent short covering contributed to the rally. Can the rally continue or will there be another downturn? This will depend mainly on what Trump announces in tariffs. If the tariffs are lower-than-feared there can be a rally in the market which will be led by externally linked sectors like pharmaceuticals and IT. On the other hand if the tariffs are severe there can be another round of downturn in the market," Vijayakumar said.