On Tuesday, India’s benchmark indices opened lower amidst global market downturns and rising trade tensions following U.S. President Donald Trump’s confirmation of lasting tariffs. The Nifty 50 declined by 108.25 points to 22,011.05, while the BSE Sensex fell by 268.60 points to 72,817.34. Both indices are down approximately 16% from September highs due to concerns over growth, corporate earnings, and foreign selling. All major sectors reported losses, and foreign portfolio investors have sold over $26 billion in Indian shares since October. Rising tariffs may impact inflation and foreign investments in India, prompting cautious market sentiment.
Indian Stock Market Today: India’s key indexes started on a downturn on Tuesday as global markets reacted adversely and trade tensions heightened following US President Donald Trump’s confirmation that his proposed tariffs will remain, according to news agency Reuters.
The Nifty 50 index began the day at 22,011.05, reflecting a decrease of 108.25 points (-0.49 percent), while the BSE Sensex opened at 72,817.34, down by 268.60 points (-0.37 percent). This marks roughly a 16% decline from historical highs reached in September amid concerns over economic growth, decreasing corporate earnings, ongoing foreign sell-offs, and trade uncertainties, as per Reuters.
All 13 major sectors posted losses at the opening, with broader small- and mid-cap stocks declining by approximately 1% each, according to Reuters. The MSCI Asia ex-Japan index also fell around 0.6%, reflecting a decline in Wall Street stocks reported overnight.
Trump’s proposed 25 percent tariffs on imports from Canada and Mexico will come into effect at 10:31 am IST on Tuesday. Wall Street reacted negatively to these proposals, seeing the Dow Jones drop by 1.5%, the S&P 500 by 1.7%, and the Nasdaq by 2.6%, as reported by The Guardian.
Additionally, Trump’s increase of tariffs on Chinese imports from 10 percent to 20 percent will also take effect around the same time. The US President noted that reciprocal tariffs would commence on April 2, prompting businesses and markets to brace for the economic ramifications.
Trump asserts that tariffs serve as a powerful mechanism to safeguard US businesses and rectify trade imbalances. As quoted by The Guardian, Trump stated, “Tariffs are easy, they’re fast, they’re efficient, and they bring fairness.”
What do tariffs mean for India?
Despite Canada and Mexico warning of potential retaliation, rising tariffs might lead to inflation in the US, causing an extended period of higher interest rates and negatively affecting foreign investments in emerging markets, including India, reported Reuters.
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“We anticipate the market to remain flat to negative due to concerns regarding continued foreign selling, the imposition of tariffs by the US on Canada and Mexico, as well as a lack of domestic triggers,” remarked Siddhartha Khemka, head of research for wealth management at Motilal Oswal Financial Services, speaking to the news agency.
Foreign portfolio investors (FPIs) have divested over $26 billion in shares within India since October, including an outflow of 47.88 billion rupees ($548.29 million) on Monday, noted Reuters.
Stocks to watch out for:
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- Maharashtra GST officials have initiated searches at three offices of RBL Bank in the state on March 3, although the lender has not disclosed details regarding the alleged violations or their financial implications.
- Oil downstream companies like Bharat Petroleum Corp, Hindustan Petroleum Corp, and Indian Oil Corp are in focus as oil prices decline to a 12-week low due to demand concerns and a potential OPEC output increase.
- Trade volumes for the Indian Energy Exchange rose by 9% in February.
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