Mumbai (Maharashtra) [India] Indian stock markets extended their losing streak on Tuesday as both benchmark indices opened in the red, reacting to escalating global concerns over a slowdown in the US economy and the implications of new tariffs imposed by US President Donald Trump.
The Nifty 50 index fell by 108.25 points (-0.49%) to open at 22,011.05, while the BSE Sensex started at 72,817.34, down 268.60 points (-0.37%). Market sentiment remained weak as investors grappled with multiple headwinds, including sectoral pressures and global uncertainties.
Key Factors Behind the Market Decline
Ajay Bagga, a banking and market expert, highlighted the dual impact of Trump’s tariffs and the ongoing Ukraine crisis on market dynamics. He noted, “Canada, Mexico, and China tariffs will go ahead on Tuesday as per the latest White House communication on social media. India is showing strong green shoots in its domestic narrative but the challenged global momentum means any bottoming in India is at least a couple of months away.”
Experts attributed the bearish trend to fears of a slowdown in the US economy, citing:
- Weak retail sales and home sales data.
- Declining consumer sentiment.
- Sluggish manufacturing indicators.
The concerns have sparked fears of corporate earnings downgrades in the US, especially at a time when US markets are seen as overvalued.
Impact of US Tariffs and Global Market Reaction
Asian markets reacted negatively to the implementation of Trump’s tariffs, heightening fears of potential recessions and broader economic instability. Major indices in the region witnessed declines:
- Japan’s Nikkei: Down 1.77%
- Taiwan Weighted Index: Down 0.7%
- Hong Kong’s Hang Seng: Down 0.33%
- South Korea’s Kospi: Down 0.26%
The European markets, however, saw investment inflows, driven by a projected Euro 170 billion in defense spending aimed at enhancing the region’s self-reliance in defense.
Oil Prices and Their Impact on Indian Markets
In a significant development, OPEC+ announced a production increase starting in April, leading to a sharp decline in crude oil prices. While typically a positive for India, a major oil importer, the broader economic concerns kept investor sentiment subdued.
Sectoral Performance in India
Among the sectoral indices:
- Nifty Bank: Managed to stay flat but in the green.
- Nifty Auto: Fell by 1%.
- Nifty IT: Dropped by 2%.
Of the Nifty 50 stocks, 45 opened in red while only 5 were in green, reflecting the broader market selloff.
Outlook and Investor Sentiment
The combination of global market weakness, concerns over US tariffs, and signs of a slowdown in the US economy have contributed to a cautious investor sentiment. As Indian markets navigate these global headwinds, experts suggest that a recovery might be months away.