Benchmark indices Nifty and Sensex are set for a flat start on Wednesday, April 2, as indicated by GIFT Nifty trends. Investors are likely to remain cautious ahead of an expected announcement from US President Donald Trump on new import tariffs, which the White House has confirmed will take immediate effect.

D-Street witnessed a sharp sell-off on April 1, with the Sensex plunging 1,400 points, nearly 2 percent, and the Nifty sliding 350 points, or 1.5 percent. Nifty IT and Pharma, most vulnerable to trade shocks, led the decline, followed by financials. Panic spread as India VIX, the market’s fear gauge, spiked 8 percent, nearing the 14 mark, signalling heightened volatility ahead.

The broader market followed suit, with the Nifty Midcap 100 and Smallcap 100 slipping 0.9 and 0.7 percent, respectively. While these indices have fallen 10-14 percent this year, analysts warn that valuations remain a concern, and more pain could be on the horizon.

Market experts suggest that Trump tariffs could help exacerbate inflationary pressure, limiting the US Federal Reserve's ability to moderate interest rates. His latest move—a 25 percent tariff on foreign cars and auto parts—has investors bracing for broader trade restrictions. Gold, the ultimate safe-haven asset, surged past $3,125 per ounce, scaling fresh all-time highs at $3,161 as risk aversion took hold.

Here are the key levels to watch out for on April 2

"The Nifty index has experienced a sharp decline, approaching the 50EMA on the daily chart. This drop follows a recent phase of consolidation, signalling a weakening sentiment. However, in the near term, the 50EMA support could play a crucial role in stabilizing the market. If this level holds, we may see a recovery," Rupak De, Senior Technical Analyst at LKP Securities, said. "That said, a decisive breakdown below 23,115 could trigger a deeper correction. On the upside, resistance is observed at 23,250—a breakout above this level could reignite bullish momentum in the market," he added.

"Bank Nifty opened the week on a weak note, slipping 1.43 percent as large-cap private banks declined. The index formed a bearish candle with a lower high and lower low, indicating extended profit booking, Bajaj Broking said. "We expect the index to consolidate within the 52,000–50,000 range, forming a base for the next leg of the uptrend while easing overbought conditions from the recent 4,200-point rally," it added. "This pullback presents a buying opportunity in quality banking stocks, as the index is likely to hold above the key breakout zone of 50,500–50,000 and gradually move toward 53,000 in the coming weeks."

The Nifty Put-Call ratio (PCR), which indicates the mood of the market, dropped further to 0.76 on April 1, against 0.92 in the previous session. The increasing PCR, or being higher than 0.7 or surpassing 1, means traders are selling more Put options than Call options, which generally indicates the firming up of a bullish sentiment in the market. If the ratio falls below 0.7 or moves towards 0.5, then it indicates selling in Calls is higher than selling in Puts, reflecting a bearish mood in the market.

The India VIX, the fear gauge, increased sharply by 8.37 percent to the 13.78 zone and climbed above short-term moving averages (10 and 20-day EMAs), making the bulls uncomfortable.