Indian Stock markets opened lower on Thursday as compared previous day closing with huge volatile. Market reacting over rising trade tensions with tariff hikes and weak global news. The Nifty50 index opened today near 24,635.25 and first 15 min bulls are involved to play the market. Nifty little bit struggled at lower level and bull are dominate and Nifty50 index reached near 24,950 at 1300 hrs. The dropped near about 200 points. From 24,950 to 24,750 in second half.
The S&P BSE Sensex fell over 600 points in second half trade. It started at lower level early in the morning session near 80,700 and made a day high 81,800. A rally about 1,000 point and then came to middle of the day level.
Why is the Indian stock market volatile ?
The current volatility in the market is mainly due to uncertainty over the impact of the new tariffs announced by USA president Mr Donald Trump On July 30. Trump imposed a 25% tariff and penalties on Indian goods, which will come into effect from 01 Aug. While these tariffs are targeted at specific sectors like textiles, auto components, leather goods, gems, jewellery and some food exports. They have created a short term nervousness and panic situation among investors and the traders.
Market experts believe that the overall market may not be severely affected as India’s exports to the US contribute only around 2% of the country’s GDP. However the impact on certain companies and sectors could be significant. Investors are reacting to this uncertainty especially in the affected sector the Indian market.
Mr G Chokkalingam said that the effect of the tariffs will mostly be hurt specific stocks rather than the whole market. Still this selective impact is enough to create volatility. As traders adjust their positions based on how they think individual companies will be affected.
What is the LONG-TERM IMPACT as per EXPERTS ?
Despite the fall some market experts believe the impact of the tariffs might not last long if trade talks between India and the US continue in a positive direction. Dr Vijaya kumar pointed out that the US tends to start with high tariff demands and then negotiates lower rates.
He explained the 25% tariff is much higher than what has been agreed in deals with other countries. This may just be a tactic to push India to offer more concessions. Eventually the rate may settle around 20% or lower.
He also suggested that investors should not panic and instead look at this dip as a buying opportunity. Focus on domestic consumption themes particularly in private sector banks, telecom, capital goods, cement, hotels and auto companies. Especially those company are with good Q1 results.
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