Why can’t Donald Trump’s tariff policy dictate Indian stock market for long? EXPLAINED | Stock Market News

Trump tariff impact: The Indian stock market extended its losing streak for the 10th straight session, dragged by consistent foreign capital outflow amid US tariff concerns and a slowdown in domestic growth. Falling for the third straight day, the benchmark BSE Sensex declined by 96 points to close below the 73,000 mark, and the NSE Nifty 50 posted its longest falling streak in its three-decade history amid a global equity rout caused by trade war worries.

The 30-share BSE barometer closed at 72,989.93, down by 96.01 points or 0.13 per cent. During the day, it dropped 452.4 points or 0.62 per cent to a low of 72,633.54 but recovered some losses in the second half. The NSE Nifty 50 fell by 36.65 points or 0.17 per cent to close at 22,082.65. The index opened below 22,000 at 21,974.45 but recovered some losses. Nifty has fallen four per cent in 10 sessions and 16 per cent from a record high in September.

Also Read: Nifty 50 posts its longest losing streak— 10 key highlights of Indian stock market today

“The domestic market exhibited a recovery from today’s lows but remained in negative territory due to adverse global cues related to escalating global trade tensions. Currently, domestic economic indicators are favourable while investors await clarity on global trades for consistency in momentum,” said Vinod Nair, Head of Research, Geojit Financial Services.

US President Donald Trump escalates trade war fears

Trump’s 25 per cent tariffs on Canada and Mexico and a cumulative 20 per cent tariff on China came into effect on Tuesday. Trump also said reciprocal tariffs will start on April 2, escalating trade tensions and dragging global financial markets. China retaliated to US tariffs, announcing 10-15 per cent hikes to import levies covering $21 billion worth of US agricultural and food products.

Higher tariffs, in addition to their potential adverse impact on global growth, could spur inflation in the US, leading to higher interest rates for longer and hurting flows into emerging markets such as India. Indian IT companies, which receive a substantial portion of their revenue from the US, were also hit by price pressures in the US. The Nifty IT index is down 14 per cent year-to-date (YTD) and has hit an eight-month low, unsettling market sentiment.

Also Read: China slaps 15% tariffs on American goods amid trade tensions with Donald Trump: How will it impact US firms, consumers?

Can Trump tariff impact Indian markets for long? Experts decode

D-Street experts believe that uncertainty unleashed by Trump is aggravating global trade. The 25 per cent tariff on Canada and Mexico and the 20 per cent tariff on China (with the additional 10 per cent imposed now) kicking in the threats are turning into action. “The retaliation to these Trump tariffs is yet to be known. Certainly, there will be responses,” said Dr V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The market expert states that if Trump’s tariff policy continues like this and soon starts impacting other countries, it will be bad for global trade and the global economy. According to the D-Street expert, India will not be spared. 

Also Read: D-Street Ahead: How will the Indian stock market move next week? Key technical levels for Nifty, Sensex

“There is one factor that will tame Trump: the market reaction. Even mighty Trump cannot influence markets…In the near term, there are no chances of a rebound in the Indian market, even though valuations are fair. Investors should remain cautious and wait to see how the scenario unfolds,” said Dr V K Vijayakumar.

Nigel Green, CEO of deVere Group, believes tariffs are a pivotal shift in global economic policy with immediate and potentially lasting consequences. “Investors who recognize the opportunity now, who take decisive action rather than reacting after the facts, will be the ones who are likely to stand to benefit most in this new era of trade and market recalibration,” said Green.

Weak global cues continue to weigh on sentiment, but selective buying limits the downside. “We maintain a cautious outlook on the index, with key support at the 21,800-22,000 zone. Among sectors, banking, financials, and metals exhibit relative strength, while others present a mixed trend. Traders should align their positions accordingly while managing risk with prudent position sizing,” said Ajit Mishra – SVP, Research, Religare Broking Ltd.
 

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.