Market Plunges After Trump's Tariff Decision: Sensex Crashes 700 Points, Nifty Below 23,150; IT Stocks Down 2.5%, Global Markets Affected.
Stock Market: Indian stock markets opened sharply lower on Thursday, April 3rd, directly impacted by US President Donald Trump's decision to impose import tariffs on over 180 countries. Weakness in global markets led to a significant decline in the Sensex and Nifty.
Sharp Decline in Sensex and Nifty
The BSE Sensex opened more than 700 points lower at 75,811, compared to its previous close of 76,617.
By 9:25 AM, the Sensex had fallen 367.39 points (0.48%) to 76,250.05.
Similarly, the NSE Nifty-50 opened around 200 points down at 23,150.30. The Nifty closed at 23,332 on Wednesday.
By 9:26 AM, the Nifty was trading 88 points (0.38%) lower at 23,244.35.
Trump's 26% Tariff: Impact on India?
US President Donald Trump announced a new "reciprocal tariff" on imports from 180 countries, including India. Under this decision, a 26% tariff will be imposed on exports from India to the US.
Trump stated that India's tariff policies are too strict and that India levies excessive duties on American goods. He termed this new tariff as "kind reciprocal".
Tariffs Imposed on Various Countries
At a White House event, Trump announced import tariffs on several countries, including:
India: 26%
China: 34% (in addition to the existing 20%)
European Union: 20%
Japan: 24%
South Korea: 25%
Vietnam: 46%
Taiwan: 32%
Australia: 10%
Sharp Decline in IT and Technology Sector
Indian IT companies, heavily reliant on US markets, were significantly impacted by the tariff decision. Their shares plummeted upon market opening:
Infosys: 2.5% decline
TCS: 2.2% decline
HCL Tech: 1.8% decline
Tech Mahindra: 2.3% decline
Global Markets Also Witness Decline
Following Trump's announcement, Asian markets also experienced significant declines:
Japan's Nikkei Index: Down 3%
South Korea's Kospi: Down 1.48%
Australia's ASX 200 Index: Down 1.62%
US markets also saw a decline on Wednesday, impacting global investor sentiment.
Market Performance on Wednesday
The previous session saw a surge in the Indian stock market:
Sensex: Closed 592 points (0.78%) higher at 76,617.
Nifty: Closed 166 points (0.72%) higher at 23,332.
However, Trump's decision triggered massive selling in the market.
Future Market Direction
Several factors could influence the future trajectory of the Indian stock market:
1. Global Market Dynamics: The ongoing volatility in international markets following Trump's decision will continue to affect Indian markets.
2. Foreign Institutional Investor (FII) Trading: Continued selling by foreign investors could lead to further market declines.
3. Nifty F&O Expiry: Activities in the derivatives market will also shape the market's direction.
4. Dollar-Rupee Exchange Rate: A weakening rupee against the US dollar could put further pressure on the market.
5. Reserve Bank of India (RBI) Policies: Any significant action by the RBI could bring stability to the market.
Investor Advice
1. Long-Term Investors Should Not Panic: Despite the market downturn, long-term investors should remain patient.
2. Avoid Weak Sectors: The IT and technology sector is most affected; therefore, avoid investing here.
3. Opportunity to Buy on Dips: Investing in b companies' stocks at discounted prices could be an opportunity.
4. Monitor Global Markets: Stability in foreign markets could lead to a recovery in the Indian market.
