The domestic equity indices traded with moderate losses in early trade. The downturn comes after US President Donald Trump announced wide-ranging tariffs on imports from partner and adversary nations alike, spurring fears of a recession in the US and trade wars worldwide. The Nifty traded below the 23,300 level. Barring the Nifty Pharma index, all the other sectoral indices on the NSE were traded in red.
At 09:30 IST, the barometer index, the S&P BSE Sensex, slumped 338.02 points or 0.45% to 76,275.82. The Nifty 50 index shed 75.05 points or 0.32% to 23,257.60.
In the broader market, the S&P BSE Mid-Cap index rose 0.39% and the S&P BSE Small-Cap index added 0.75%.
The market breadth was positive. On the BSE, 1,307 shares rose and 1,797 shares fell. A total of 140 shares were unchanged.
Foreign portfolio investors (FPIs) sold shares worth Rs 1,538.88 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 2,808.83 crore in the Indian equity market on 2 April 2025, provisional data showed.
Trump's Tariff Shock:
US President Donald Trump has announced a sweeping set of reciprocal tariffs, aiming to counter what he calls unfair trade practices. A 10% baseline tariff will be imposed on all imports starting April 5, impacting the United Kingdom, Singapore, Brazil, Australia, New Zealand, Turkey, Colombia, Argentina, El Salvador, the United Arab Emirates, and Saudi Arabia. However, around 60 countries deemed worst offenders'those that impose higher tariffs on US goods or create trade barriers'will face significantly steeper tariffs beginning April 9. These include China (54%), the European Union (20%), Vietnam (46%), Thailand (36%), Japan (24%), Cambodia (49%), South Africa (30%), and Taiwan (32%). While Canada and Mexico are exempt from these new tariffs, they remain subject to previous trade measures tied to border security and fentanyl-related concerns.
Additionally, Trump has also announced a 25% tariff on all foreign-made automobiles, set to take effect at midnight on April 3.
Importantly, no new reciprocal tariffs were announced for the pharmaceutical sector. According to a White House fact sheet, drugs and certain other products, some of which are already subject to existing tariffs, will not be affected by the latest levies. However, Trump has hinted that future tariffs on pharmaceuticals, semiconductors, and other sectors may be unveiled at a later date.
India will face a 25% tariff on steel, aluminium, and auto-related goods, and no tariffs on pharmaceuticals, semiconductors, copper, or energy products. For the remaining products, India will be taxed a reciprocal tariff of 27%.
Stocks in Spotlight:
ESAF Small Finance Bank added 2.11% after the bank's total deposits jumped 17.16% to Rs 23,277 crore as on 31st March 2025 as compared with Rs 19,868 crore as on 31st March 2024. Gross advances increased 1.08% YoY to Rs 18,975 crore as in 31st March 2025.
Punjab National Bank shed 0.23%. The bank reported a 13.6% increase in global advances, totaling to Rs 11,17,407 crore as on 31st March 2025 as compared with Rs 9,83,325 crore as on 31st March 2024. Global deposits jumped 14.3% YoY to Rs 15,65,744 crore as on 31st March 2025.
Numbers to Track:
The yield on India's 10-year benchmark federal paper was up 1.40% to 6.575 as compared with previous close 6.480.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 85.6900, compared with its close of 85.5200 during the previous trading session.
MCX Gold futures for 5 June 2025 settlement rose 0.71% to Rs 91,367.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 0.65% to 103.
The United States 10-year bond yield tumbled 3.53% to 4.074.
In the commodities market, Brent crude for June 2025 settlement fell $1.66 or 2.21% to $73.29 a barrel.
Global Markets:
US Dow Jones index futures tumbled 877 points, signaling a weak opening for Wall Street as markets reacted to President Donald Trump's latest trade offensive. Trump announced a sweeping 10% tariff on all imported goods, with even steeper reciprocal duties for certain nations.
Asia-Pacific markets plunged on Thursday after U.S. President Donald Trump imposed hefty reciprocal tariffs on over 180 countries and territories - several of which are in the region.
In a bold move, Trump unveiled new trade measures on Wednesday, slapping a 24% reciprocal tariff on Japan, despite its status as one of the United States' closest allies. China faces an additional 34% tariff, adding to the existing 20% levies. Meanwhile, the European Union and others will see tariffs ranging from 20% to 49%.
The broad-based tariffs take effect on April 5, while the country-specific hikes begin on April 9. Notably, Canada and Mexico were exempt from the baseline tariffs due to existing agreements, but they will still be subject to 25% duties on most goods.
Additionally, the White House announced a 25% tariff on foreign-made automobiles and key auto parts, set to take effect on April 3, 2025.
Trump defended the move, citing unfair trade practices and currency manipulation, arguing that the tariffs would revitalize American industries and reduce national debt.
Financial markets responded swiftly, with US stock futures plunging on fears of rising inflation and retaliatory measures from key trading partners. Asian markets also slid as investors scrambled for safe-haven assets, worried that Trump's aggressive trade stance could dent global growth.
Before the tariff announcement, US stocks had a volatile session, with major indices posting gains. The S&P 500 rose 0.7%. The Dow Jones Industrial Average added 0.6%, and the Nasdaq composite climbed 0.9%.
Tesla rebounded, surging over 5%, following reports that CEO Elon Musk may step down from his government advisory role to fully focus on the EV company.
Rivian Automotive slumped 6% after reporting a sharp decline in Q1 deliveries, as demand softens.
Ncino plunged 20% after issuing disappointing guidance, missing Wall Street estimates.
CoreWeave Inc extended its rally, soaring 16%, amid reports that Google is in advanced talks to rent Nvidia AI services from the cloud computing firm.
On the macroeconomic front, the US ADP National Employment Report showed that private payrolls increased by 155,000 in March, following an upwardly revised 84,000 gain in February'a sign that the labor market remains resilient despite economic uncertainties.
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