Indian benchmark indices are likely to open on a muted note on Wednesday, after a sharp sell-off in the previous session, amid the uncertainty over President Donald Trump's impending tariff rollout, which may continue to rattle markets.

Nifty futures on the NSE International Exchange traded 9.50 points or 0.04 per cent down, at 23,312, hinting at a negative start for the domestic market on Wednesday. Market sentiments remain edgy this week ahead of Trump's reciprocal tariff plans on April 2 as the Asian peers opened mostly lower.

BSE Sensex cracked 1,390.41 points, or 1.80 per cent to end the session at 76,024.51, while NSE Nifty50 index bled 353.65 points, or 1.50 per cent to settle at 23,165.70 for the day. BSE midcap index crashed more than a per cent, while BSE smallcap index managed to settle in green. Fear Gauge India VIX soared more than 8 per cent to 13.78-level.

Amid heightened global volatility ahead of the anticipated US reciprocal tariff announcement tomorrow, the domestic market witnessed a significant sell-off. Investors are eagerly awaiting the specifics of these tariffs while also keeping a close eye on ongoing negotiations for a potential Indo-US trade agreement, said Vinod Nair, Head of Research, Geojit Investments.

"Despite the short-term volatility related to tariffs, positive domestic factors such as an expected recovery in earnings growth, potential interest rate cuts by the RBI, and moderation in valuations are likely to provide stability and support for investors," he said.

Provisional data available with NSE suggest that FPIs turned net sellers of domestic stocks to the tune of Rs 5,901.63 crore on Tuesday, April 01. On the other hand, domestic institutional investors (DIIs) turned net buyers of Indian equities to the tune of Rs 4,322.58 crore.

Investors slashed their equity bets ahead of the start of Trump's reciprocal tariff imposition on imported goods, as the decision is expected to affect the advantage India had over the US, said Prashanth Tapse, Senior VP (Research), Mehta Equities. "Domestic markets underperformed other global indices as investors fear the tariff decision could hurt the sentiment and trigger further downfall," he said.

Oil prices steadied on Wednesday after falling in the previous session on concerns new US tariffs set to be unveiled later in the day may deepen a global trade war that could limit crude demand. Brent futures were down 2 cents to $74.47 a barrel after slipping 0.4 per cent on Tuesday. US West Texas Intermediate crude futures were up 1 cent to $71.21 after dropping 0.4 per cent.

The S&P 500 and the Nasdaq Composite both closed higher on Tuesday, after a topsy-turvy day on Wall Street dominated by investor angst ahead of the impending tariff announcements from the Trump administration. The White House confirmed on Tuesday that President Donald Trump will impose new tariffs on Wednesday.

The S&P 500 gained 21.22 points, or 0.38 per cent, to 5,633.07 points, while the Nasdaq Composite climbed 150.60 points, or 0.87 per cent, to 17,449.89. The Dow Jones Industrial Average edged down 11.80 points, or 0.03 per cent, to 41,989.96.

Nifty levels to watch
Nifty has retraced 38.2 per cent of its recent rally and is now testing a crucial support zone around 23100, which aligns with the 20 DEMA and 50 DEMA. A breach could push prices lower toward the 23000–22900 range, said Rajesh Bhosale, Equity Technical Analyst at Angel One. "Looking at March’s bullish candle, a buy-on-dip approach was suggested, making the mentioned support levels critical. For bullish momentum to regain strength, Nifty needs to close above the 89 DEMA at 23350," he said.

This drop follows a recent phase of consolidation, signaling a weakening sentiment. However, in the near term, the 50 EMA support could play a crucial role in stabilizing the market. If this level holds, a recovery may be seen, said  Rupak De, Senior Technical Analyst at LKP Securities. "A decisive breakdown below 23,115 could trigger a deeper correction. On the upside, resistance is observed at 23,250,"

Nifty Bank levels to watch
Nifty Bank opened with a gap-down and breached support near the 200-DSMA and formed a bearish candle on the daily chart, indicating weakness, said Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates "The next major support for the index is placed near 50,650, while 51,020 will act as an immediate hurdle," he added.

"The current breather should be used to accumulate quality banking stocks as we expect the index to sustain above the recent major breakout area of 50,500-50,000 and gradually head towards 53,000 levels in coming weeks being the measuring implication of the recent 10 weeks range breakout," said Bajaj Broking.