INDIA STOCKS-India's Nifty 50 set for sharp drop amid global trade war, US recession fears

By Bharath Rajeswaran

April 7 (Reuters) - India's benchmark Nifty 50 is poised to open sharply lower on Monday, as concerns over a global trade war and growing recession fears in the U.S. triggered a stock market rout on Wall Street and in other Asian markets.

The GIFT Nifty futures GIFc1 were trading at 22,089 as of 7:55 a.m. IST, indicating that the blue-chip Nifty 50 .NSEI will open about 3.6% lower than Friday's close of 22,904.45.

Other Asian markets slumped, with the MSCI Asia ex-Japan index .MIAPJ0000PUS losing 6.2%. Japan's Nikkei 225 dropped 6% in early trade.

The Nasdaq index confirmed it entered a bear market on Friday, as oil prices and other commodities plunged amid a massive global market decline following U.S. President Donald Trump's announcement of sweeping tariffs on Wednesday. MKTS/GLOB.N

"We see the recent lows around 21,800 get re-tested on the Nifty 50 given this week's price action," said Abhishek Goenka, founder & chief executive officer of India Forex & Asset Management.

"We remain cautious in the near term given the tariff-related uncertainty."

Trump's new tariffs are "larger than expected", and the economic impact on inflation and growth will be likely, said Federal Reserve Chair Jerome Powell on Friday, flagging an uncertain outlook on the U.S. economy.

The worries of a potential recession in the U.S. have led to investors wagering a 25-basis-point additional rate easing in 2025 by the U.S. Federal Reserve.

India's central bank will deliver its policy decision on Wednesday and is widely expected to cut rates by 25 bps amid expectations that monetary policy may turn more supportive as U.S. tariffs threaten to hurt the economy.

India's Nifty 50 is trading about 13% lower than the record high levels hit in late September, as slowing earnings and growth triggered a $27-billion foreign exodus from domestic markets.