As global markets react to new tariff announcements from US President Donald Trump, Indian stock exchanges are poised for a shaky start. Early indicators from GIFT Nifty suggest a sluggish opening for major indices such as Sensex and Nifty 50. On April 3, the Nifty 50 experienced a decline of 0.35%, settling at 23,250.1, while the Sensex saw a 0.42% drop to 76,295.36.

Global Trade Concerns

Trump’s tariffs have sent shockwaves through international markets, raising alarms in economies including India, China, Japan, and Vietnam. These tariffs, aimed at reducing trade deficits and bolstering US manufacturing, could impose steep duties—up to 46% on certain imports. This situation not only threatens to escalate costs for American businesses but could also disrupt established supply chains. In response, nations such as the European Union, China, and Canada are contemplating countermeasures, potentially leading to intense trade discussions in the following weeks.

New Tariff Regulations

Effective April 5, the US will implement a 10% tariff on all imports, marking just the beginning of a series of increases. Countries with significant trade imbalances will face even harsher tariffs. Notably, China is expected to endure a 34% tariff, while India will face 26%, Japan 24%, and the European Union 20%. These measures, set to roll out on April 9, 2025, are likely to escalate trade tensions, elevate costs, and provoke responses from affected nations.

Market Reactions

Wall Street experienced significant turmoil on Thursday, with the S&P 500 plunging 4.84% to 5,396.52, marking its worst performance since June 2020. This downturn followed President Trump’s tariff announcement, which fueled fears of a potential global trade war and economic recession. The Dow Jones Industrial Average dropped nearly 1,680 points to 40,545.93, while the Nasdaq faced a staggering 5.97% decline to 16,550.61. Over 400 S&P 500 stocks ended the day lower.

Asian Market Trends

On Friday, Asian markets mirrored Wall Street’s decline, continuing the downward trend initiated by the tariff news. Japan’s Nikkei 225 fell 2.07%, with the Topix dropping 2.69%. In Australia, the ASX 200 slipped 1.06%, while South Korea’s Kospi contracted by 1.15%. The smaller Kosdaq index also saw a 0.68% dip, as investor uncertainty loomed large in the region.

Gold Prices Surge

On April 3, gold prices surged to unprecedented heights, hitting an intraday peak of $3,167 before stabilizing around $3,128. As of April 4, gold in India remained robust, with 24-carat gold priced at Rs 93,390 per 10 grams, and 22-carat gold at Rs 85,610. Meanwhile, 18-carat gold was available for Rs 70,050 per 10 grams.

US Dollar Status

The US Dollar Index (DXY), which tracks the dollar’s performance against a variety of currencies, stood at 101.81 on Friday morning. This index assesses the dollar’s strength relative to significant currencies such as the British Pound, Euro, Swedish Krona, Japanese Yen, and Swiss Franc. The Indian rupee was recorded at 85.44 against the US dollar as of April 3.

FII and DII Activity

On April 3, following the US government’s announcement of reciprocal tariffs, foreign institutional investors (FIIs) sold off equities worth Rs 2,806 crore, extending their exit from the Indian markets. Conversely, domestic institutional investors (DIIs) stepped in, making net purchases totaling Rs 221 crore, providing a modicum of support.

Crude Oil Prices

On April 4, oil prices experienced a slight dip, with WTI crude decreasing by 0.58% to $66.56 per barrel and Brent crude falling 0.52% to $69.78 per barrel.

In these turbulent times, the global economic landscape remains uncertain, making it essential for investors to stay informed about market movements and potential impacts on their portfolios.