Indian shares set to fall as US tariffs hit markets, Trump’s tariffs send markets reeling, amid trade war and recession fears?
The recent announcement by U.S. President Donald Trump to impose a 26% reciprocal tariff on imports from India has sent shockwaves through global markets, particularly impacting Indian shares. This move is part of a broader strategy to introduce a 10% baseline tariff on all trade partners, with even higher duties on several other countries, including a 34% tariff on China set to take effect on April 9.
Impact on Indian Markets
Stock Market Decline: Indian shares are expected to open lower on Thursday, with the Nifty 50 index likely to start below its previous closing figure of 23,332.35. GIFT Nifty futures have been trading lower, indicating a gap-down start for the markets.
Rupee Weakness: The Indian rupee is also anticipated to weaken due to the downturn in Asian equity and currency markets.
Sectoral Impact: Certain sectors, such as pharmaceuticals, are currently exempt from these tariffs.
Global Market Reaction
Trade War Fears: Trump’s aggressive tariff measures have reignited fears of a global trade war, leading to significant market volatility. Investors are seeking refuge in safe-haven assets like bonds, gold, and the yen.
Economic Concerns: Analysts warn that these tariffs could slow economic growth, impact corporate earnings, and fuel inflation, potentially pushing the U.S. into a recession.
Asian Market Declines: Other Asian markets have also experienced declines, with Japan’s Nikkei plunging to an 8-month low and the MSCI Asia ex Japan index falling by 1%.
Future Outlook
The imposition of these tariffs marks a significant escalation in trade tensions and is likely to lead to months of negotiations and uncertainty. The immediate reaction suggests that markets are bracing for further volatility and potential economic slowdowns.
