Market Update: Global Indices React to US Tariffs
As the world grapples with shifting market dynamics, the GIFT Nifty is expected to open lower today, following the US’s recent announcement regarding reciprocal tariffs. This decision, which affects most countries including India but excludes China, has raised concerns among investors. The Trump administration has implemented a staggering 145% tariff on Chinese imports, significantly escalating tensions in the ongoing trade dispute.
US Tariff Impact on Asian Markets
The repercussions of the US tariff hike were felt across Asian markets on Friday. Japan’s Nikkei 225 plummeted by 4.5%, settling at 33,056. Meanwhile, South Korea’s Kospi dipped 1.47% to 2,408, and Hong Kong’s Hang Seng Index lost over 1%. The Shanghai Composite in China also saw a minor decline of 0.10%, closing at 3,221.
Wall Street’s Sharp Decline
The US stock market experienced a significant downturn on Thursday. The Dow Jones Industrial Average fell by 1,014.79 points, or 2.5%, closing at 39,593.66. The S&P 500 and Nasdaq Composite followed suit, dropping 3.46% and 4.31% respectively. These losses were attributed directly to President Trump’s tariffs, further intensifying the trade war narrative.
Understanding the Trade War
The recent escalation in tariffs has brought the total duty on many Chinese goods to an eye-watering 145%. This aggressive strategy by the Trump administration aims to protect domestic industries but has sparked a wave of retaliatory measures from Beijing. Notably, reciprocal tariffs on numerous countries have been temporarily paused for 90 days, providing a brief respite in an otherwise tense international atmosphere.
IT Sector Under Scrutiny
In related news, US Defense Secretary Pete Hegseth has initiated the cancellation of IT service contracts worth $5.1 billion with major firms like Accenture and Deloitte. He described these pacts as non-essential, suggesting that such services could be performed by Pentagon employees instead. This move is expected to save nearly $4 billion and reflects a growing scrutiny on government spending.
Currency and Commodity Movements
The US Dollar Index (DXY), which gauges the dollar’s strength against a basket of six currencies, fell by 0.76% to 100.10. This decline mirrors the rupee’s depreciation, which dropped by 0.49%, closing at 86.69 to the dollar on April 10.
In the commodities market, crude oil prices saw a downturn, with WTI trading at $59.59 (-0.80%) and Brent at $62.89 (-0.69%).
Gold Prices Surge
In a contrasting trend, gold prices have surged significantly, rising by 3.2% to $3,177.50 in international markets. In India, 24-carat gold has jumped to Rs 92,170 per 10 grams, marking a 6% increase over the past month. The 22 kt gold rate is currently at Rs 84,489, while 18-carat gold stands at Rs 69,128.
Investor Insights
Recent data reveals that foreign institutional investors (FIIs) were net sellers, offloading shares worth Rs 4,358.02 crore, while domestic institutional investors (DIIs) stepped in as net buyers, acquiring shares worth Rs 2,976.66 crore on April 9.
As the global economic landscape continues to evolve, investors are urged to stay informed and prepared for potential volatility in the markets.
