Indian stock markets opened under significant selling pressure on Thursday, reacting negatively to U.S. President Donald Trump's latest tariff announcement. The global decline triggered by the news led to sharp losses at market opening, with investors shifting funds towards safer assets.
The benchmark BSE Sensex plunged over 800 points, opening at 75,811.12, marking a 1.05% decline. Similarly, the NSE Nifty 50 index fell by 182.05 points, opening at 23,150.30, down by 0.78%. Market experts attributed the sharp drop to Trump's decision to impose reciprocal tariffs, leading to concerns over the potential impact on India's economy.
Ajay Bagga, a banking and market expert, explained that the fallout from the tariff announcement would likely affect India through the U.S. dollar, possible declines in exports, squeezed margins, and potential outflows from emerging markets (EM). "Investors are rushing into safe havens like gold, the yen, and Swiss francs, which is exacerbating the sell-off in equities," Bagga noted.
Experts also warned of heightened tensions between the U.S. and China, with the possibility that China could devalue its currency in retaliation to the new tariffs. This could worsen market volatility, leading to further losses in equities.
Sector-wise, the Nifty Auto index saw a decline of 1.25%, Nifty IT dropped by 1.67%, and Nifty Metals fell by 0.81%. However, the pharma sector stood out with a 2.95% gain, unaffected by the tariffs on other sectors.
Akshay Chinchalkar, Head of Research at Axis Securities, observed that the broader Asian markets were also in the red following Trump's tariff announcements. "Asia is a sea of red, and the Nifty is expected to open weak. The market will likely focus on support levels around 23,090-23,141 and 22,800-23,000, which will be critical to watch," he said.
The negative sentiment was widespread across Asian markets, with Japan's Nikkei 225 plummeting 3%, Hong Kong’s Hang Seng index falling 1.45%, and South Korea’s Kospi index dropping more than 1%. U.S. futures markets mirrored the global decline, with Dow Jones futures down by 1.94%, signaling a weak opening for Wall Street.
As global uncertainties continue to rise, market participants are expected to remain cautious, closely monitoring the ongoing trade developments and their potential economic impact. The next few days will be crucial in determining the market's trajectory amidst the heightened global trade tensions.
(This story is published from a syndicated feed)