Indian shares succumb to uncertainty over Trump’s tariff plans

On Tuesday, the India's benchmark indexes fell amid fear following the US president Donald Trump’s promise of trade sanctions against the neighboring nations just hours into his presidency.

The Nifty 50 lost 0.66% to 23,192.9 points at 10:54 am IST while the BSE Sensex lost 0.85% to 76,415.35. The benchmarks rose and then went the other way.

Twelve of the 13 major industries recorded losses. Even the more homegrown smallcaps and midcaps slipped 1.7% apiece.

Investors around the world cheered when the US President Donald Trump, just hours after taking office Monday, announced his administration was considering 25% trade tariffs on Mexico and Canada starting Feb. 1.

The market ‘is in a fragile state’ after Trump’s policy statements, according to Lemonn Markets Desk analyst Satish Chandra Aluri.

Trump’s tariff policy remains an open question for Indian markets and uncertainty over what tariffs he is going to impose on India has put investors on high alert, Prashant Tapse, senior vice president of research at Mehta Equities told ET.

Trump’s US policy environment would boost the dollar and Treasury yields, and increase inflation to allow for lower interest rates.

That in turn might divert foreign portfolio investors away from emerging markets like India. In fact, foreign portfolio investors (FPI) have sold Indian shares and bonds so far in January for around $6.7 billion.

Among all sectors, financials lost 1%, pushing the markets lower. They had rallied 1.4% the previous session.

Among individual stocks, online food delivery platform Zomato dropped 11% after it reported a drop in its December quarter earnings.

Sunteck Realty gained 5.4% after swinging back to quarterly profits from a loss a year ago.

The pharmaceutical manufacturer Venus Remedies jumped 5% as it renewed its European good manufacturing practices certification. ($1 = 86.4110 Indian rupees) (Written by Bharath Rajeswaran, Bengaluru; Edited by Sumana Nandy and Savio D'Souza).