Indian stock markets started the day on a weak basis after Donald Trump announced a 25 percent tariff on US auto imports, which will be levied from April 2, 2025.
In Mumbai, the Nifty 50 index began at 23,422.45 and declined by 64.40 points, or 0.27 percent. The BSE Sensex, on the other hand, began at 77,089.12 and declined by 199.38 points, or 0.26 percent.
The move of Trump to impose a 25 percent tariff is an aggressive ratcheting up of his trade war. Canada, Mexico, Germany, South Korea, and Japan would be hit the hardest by the move.
They have predicted Indian markets to be volatile today due to the disruptions to trade caused by these tariffs and volatility in other large markets.
Ajay Bagga, a market and banking commentator, observed, "The story of the day is the 25 percent US tariffs on autos. US automaker stocks have fallen 2 percent to 6 percent after-hours. Japanese and South Korean auto manufacturers are down 2 percent to 4 percent in Asia. The broad markets are having trouble with this story and the story later in the day that global tariffs would be released April 2 together with industry-specific tariffs on drugs and semiconductors."
He also added, "Indian markets will be affected by global volatility and the normal monthly expiry volatility today. Markets will be nervous with April 2 announcements looming large on the head. A defensive strategy is in order."
Sector-wise, Indian auto sector stocks were hammered, and the Nifty Auto index fell 1.37 percent in the initial stages. All sectoral indices except Nifty FMCG were under selling pressure.
Among the Nifty 50 index, IndusInd Bank and Trent were the winners, and the largest losers were NTPC, Tech Mahindra, CIPLA, and Axis Bank.
Akshay Chinchalkar, Axis Securities' Head of Research, believed that yesterday's fall in Nifty ended its seven-day winning streak. The market closed below yesterday's low and hence 23869 emerged as a level to be wary of. He believes that this fall appears more in the nature of a temporary pause in the recent sharp uptrend than the start of a bigger collapse. Support continues at 23275 to 23402 and resistance at 23640 and subsequently 23720. Interestingly, small- and midcap indexes are also lagging behind the Nifty, reflecting a defensive market attitude.
In the rest of Asia's bourses, Japan's Nikkei 225, Taiwan Weighted, and South Korea's KOSPI fell while this article was being written, although Hong Kong's Hang Seng index rose by 1.28 percent.
