Mumbai (Maharashtra) [India]: Indian markets opened under pressure on Thursday following US President Donald Trump’s announcement of a 25 per cent flat tariff on US auto imports, set to take effect from April 2, 2025.
The Nifty 50 index opened at 23,422.45, dropping 64.40 points or -0.27 per cent, while the BSE Sensex started at 77,089.12, losing 199.38 points or -0.26 per cent.
Trump’s decision to impose a 25 per cent tariff on US auto imports marks a significant escalation in trade tensions. The move is expected to impact major auto-exporting nations, including Canada, Mexico, Germany, South Korea, and Japan.
Market experts warned of increased volatility in Indian equities due to global trade disruptions and uncertainty in other major markets.
Experts Weigh In on Market Volatility
Ajay Bagga, Banking and Market Expert, highlighted the global impact of the tariffs on auto stocks.
“25 per cent US Auto tariffs are the raging issue this morning. US auto maker stocks are down in post trading hours by 2 per cent to 6 per cent. Japanese and South Korean auto makers are down this morning in Asian trading by a similar 2 per cent to 4 per cent. Broader markets are digesting this news and the impending announcements of reciprocal global tariffs on April 2nd as well as sectoral tariffs on pharmaceuticals and semi-conductors,” he said.
He further warned that Indian markets would experience dual volatility—global trade disruptions and domestic monthly expiry-related fluctuations.
“Indian markets will face the global disruption volatility as well as the domestic monthly expiry related volatility today. Given the impending April 2nd announcements, markets will remain on edge. Caution continues,” he added.
Sectoral Impact and Market Performance
The auto sector in India also felt the pressure, with Nifty Auto declining by 1.37 per cent at the opening. Except for Nifty FMCG, all other sectoral indices faced selling pressure.
Within the Nifty 50 index, IndusInd Bank and Trent were among the top gainers, while NTPC, Tech Mahindra, CIPLA, and Axis Bank were the top losers.
Akshay Chinchalkar, Head of Research at Axis Securities, analyzed the recent market movement.
“Yesterday’s decline in the nifty ended a seven-day winning run for the benchmark. The market also finished below the previous day’s low, which means 23869 is now an important swing high. The decline looks more like a retreat to the near-vertical advance we have seen recently, than the beginning of a larger downturn, for now. 23275-23402 offers support while resistance lies at 23640 followed by 23720. What’s notable is that small- and midcap benchmarks are not as strong as the nifty, which means sentiment is more guarded,” he explained.
Global Market Reaction
Elsewhere in Asia, markets showed mixed reactions. Japan’s Nikkei 225, Taiwan Weighted, and South Korea’s KOSPI were trading lower at the time of reporting, while Hong Kong’s Hang Seng index showed strength, rising 1.28 per cent.