Trade Setup for April 2: Nifty Trajectory Hinges on Trump’s Tariff Announcement

Trade Setup for April 2: As Indian markets enter the new financial year (2025-26), investors remain on edge ahead of US President Donald Trump’s impending tariff announcement on April 2. The trade setup for April 2 suggests heightened volatility, with export-driven sectors like IT and pharmaceuticals likely to react sharply to the policy decision.

This article provides a comprehensive trade setup for April 2, analyzing key support and resistance levels, sectoral trends, and expert insights to help traders navigate the uncertainty.

Market Recap: April 1 Session

Indian equities started FY25 on a weak note, with the Nifty 50 plunging 1.5% (354 points) to close at 23,166, while the Sensex dropped 1.3%. The Nifty Bank underperformed, falling 1.43% to 50,827.50.

Key Observations from April 1 Session:

Sectoral Performance (April 1)

• Realty (-3.1%) – Worst-performing sector
• IT (-2.8%) – Hit by tariff fears
• Financials (-2.1%) – Banks under pressure
• Pharma (-1.4%) – Defensive buying seen

Trade Setup for April 2: Key Triggers

1. US Tariff Announcement (Crucial for April 2 Trade Setup)

The trade setup for April 2 hinges on Trump’s tariff decision, expected to impact:

• IT stocks (TCS, Infosys, HCL Tech) – Higher tariffs could hurt margins
• Pharma (Sun Pharma, Dr. Reddy’s) – Export-dependent sector
• Auto (Tata Motors, M&M) – If steel/aluminum tariffs rise

Possible Scenarios:

2. Technical Levels to Watch (Nifty & Bank Nifty)

Nifty 50 Trade Setup for April 2

• Support: 23,100 (20 & 50-DEMA), 23,000 (Psychological level)
• Resistance: 23,250 (Immediate hurdle), 23,400 (Key reversal level)

Expert Take:

“A decisive break below 23,115 could trigger a deeper correction towards 22,900. However, if Nifty holds 23,100, a rebound towards 23,400 is possible.” – Rupak De, LKP Securities

Bank Nifty Trade Setup for April 2

• Support: 50,390 (38.2% Fibonacci retracement)
• Resistance: 51,400 (Key swing high)

Expert Take:

“Bank Nifty has broken below 51,000; if it sustains below this level, further downside to 50,390 is likely.” – Om Mehra, SAMCO Securities

3. FII/DII Activity

• FIIs: Net sellers (₹1,200 crore on April 1)
• DIIs: Mild buying (₹800 crore)

Stocks to Watch on April 2

Potential Gainers (If Tariffs Are Mild)

Potential Losers (If Tariffs Are Harsh)

Derivatives Data: Key Insights for April 2 Trade Setup

Nifty Options Data (April 2 Expiry)

• Max Call OI: 23,500 (Strong resistance)
• Max Put OI: 23,000 (Strong support)

FII Activity in Index Futures

• Net Shorts Increased: FIIs added 12,000 short contracts, indicating bearish bias.

Global Cues Impacting Trade Setup for April 2

• US Markets: Dow futures down 0.4% ahead of tariff news
• Gold Prices: At record highs ($3,120/oz) – Safe-haven demand
• Crude Oil: Brent at $87/barrel – Could impact inflation expectations

Final Trading Strategy for April 2

Bullish Case (If Tariffs Are Mild)

• Buy IT & Pharma stocks on dips
• Nifty target: 23,400-23,500
• Bank Nifty target: 51,400-51,800

Bearish Case (If Tariffs Are Aggressive)

• Short rallies in Nifty near 23,250
• Bank Nifty could drop to 50,000-50,390
• Defensive plays: Gold ETFs, FMCG stocks

Conclusion: How to Navigate April 2 Trade Setup

The trade setup for April 2 is highly event-driven, with Trump’s tariff decision dictating market direction. Traders should:

1. Monitor global cues at market open
2. Watch Nifty’s reaction at 23,100 (support) and 23,250 (resistance)
3. Stay cautious in IT, Pharma, and Auto stocks

A mild tariff announcement could trigger a relief rally, while harsh measures may extend the correction. Adjust positions accordingly and use strict stop-losses.

Final Word: The trade setup for April 2 is all about risk management. Stay alert, trade with discipline, and capitalize on volatility-driven opportunities.

You might also like to read: Intraday Trading Strategy for 1st April: Nifty at 22,450 – Key Levels & Setup