Stock markets in India experience a decline due to President Trump's threats regarding tariffs on Russian oil imports, with the Nifty settling at 24,649.
Indian Stock Markets Suffer as US-India Trade Tensions Escalate
The Indian stock markets have taken a hit due to the escalating trade tensions between India and the United States. The BSE Sensex and Nifty 50 have shown signs of vulnerability, with key export sectors feeling the brunt of the tariff threats.
According to reports, the renewed selling pressure was observed on the Nifty's top four constituents by weightage: HDFC Bank, ICICI Bank, Reliance Industries, and Infosys. In today's trading session, Bank Nifty underperformed its peers, with losses in HDFC Bank and ICICI Bank weighing on the Index.
The Nifty 50 at National Stock Exchange (NSE) closed at 24,649.55, down 73.20 points or 0.30%. The BSE Sensex closed at 80,710.25, down 308 points or 0.38%. During trading, 1708 stocks advanced, 2184 stocks declined, and 143 stocks remained unchanged.
The drop in the stock markets can be attributed to fresh tariff warnings from US President Donald Trump over India's imports of Russian oil. A new social media post by Trump threatening secondary tariffs on India for buying Russian crude oil caused concern.
Experts warn that the deeper impact, especially on export-facing companies, is likely to continue for months. The markets are currently trapped in a "deadly waiting game," reflecting caution and uncertainty as investors weigh the likelihood and severity of the trade conflict’s continuation.
Stocks with direct US export exposure have seen notable price pressure amid fears of prolonged tariff-related disruptions. The ADX, a key trend strength indicator, has been moving up quietly, settling marginally above the 25 mark, indicating early signs of momentum shifting in the favor of bears.
The Nifty has been moving in a narrow range, forming an NR3 pattern on the daily chart. The daily RSI has been hovering around the 40 mark. This narrow range pattern formation suggests that the price is expected to experience a significant move in either direction post this consolidation.
Ajay Bagga, a banking and market expert, said that Trump's threats were overlaying an otherwise positive market trend. Moody’s has warned that the tariff increase could slow India's GDP growth by about 0.3 percentage points for FY2025-26 due to dampened manufacturing prospects and potential reversal of recent foreign investment gains, particularly impacting India’s manufacturing and electronics sectors.
Looking ahead, Ashika Institutional Equities expressed caution ahead of the monetary policy announcement. The full extent of the impact depends on India’s response to the tariffs and whether the trade tensions escalate or ease.
In summary, the Indian stock markets have reacted negatively but not precipitously so far. The full extent of the impact depends on India’s response to the tariffs and whether the trade tensions escalate or ease. Moody's projects a modest but meaningful slowdown in growth tied to these tariffs, underscoring the broader economic risks beyond market fluctuations.
- The opinion among financial analysts suggests that the ongoing US-India trade tensions, as indicated by the news about fresh tariff warnings, will likely have a deep and lasting impact on business sectors with export-facing companies feeling the brunt.
- Despite the negative response of Indian stock markets in the midst of US-India trade tensions, experts like Ajay Bagga hold the view that Trump's threats are overlying an otherwise positive market trend.
- In the realm of finance, the current situation in the Indian stock markets, as reflected by the general-news, presents a delicate balance between caution and uncertainty, with the markets seemingly trapped in a "deadly waiting game" as investors assess the severity and continuation of the trade conflict's impact.
