Stock indices Sensex and Nifty poised for a downward start, as fresh U.S. tariffs become active
In a significant development, the US President Donald Trump's decision to impose an additional 25 percent tariffs on Indian imports took effect on Wednesday. This move sent shockwaves through the Indian markets, causing the benchmark indexes Sensex and Nifty to fall over 1 percent on Tuesday.
Meanwhile, foreign institutional investors (FIIs) offloaded shares worth Rs. 6,516.49 crore on a net basis on Tuesday, indicating a wave of selling pressure. However, domestic institutional investors (DIIs) showed resilience, buying shares to the tune of Rs 7,060.37 crore on the same day.
The US markets, on the other hand, ended higher overnight. The Dow added 0.3 percent, and the Nasdaq Composite edged up by 0.2 percent. The S&P 500 reached a new record closing high. In Europe, stocks ended mixed. The pan-European STOXX 600 gained 0.1 percent, while the German DAX dipped 0.4 percent, the U.K.'s FTSE 100 and France's CAC 40 showed slight decreases of 0.1 percent and 0.4 percent respectively. European markets were mixed in the morning, with Asian markets being mixed as well.
The tech sector was in focus, with investors bracing for Nvidia's results. Unfortunately, Nvidia's sales outlook missed lofty expectations, causing a decline in the company's shares.
In the currency markets, the rupee fell by 12 paise to close at 87.68 against the greenback due to strong dollar demand from importers. The dollar index fell as investors bet on a near-term Fed rate cut. Short-dated Treasuries retreated after two days of gains.
Oil experienced a decline from its previous session, now below $87 per barrel. Gold is currently trading slightly lower, at around $3400 per troy ounce.
It's worth noting that the Mexican government is reportedly pushing for higher tariffs on Chinese imports. However, there's no indication that any other official or body independently made the decision to impose 50 percent tariffs on Indian goods apart from President Trump's administration.
Indian markets were closed on Wednesday for Ganesh Chaturthi, and it remains to be seen how the markets will react once trading resumes.
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