The Indian stock market opened weak on Thursday after the US imposed 50% tariffs on Indian goods, but later recovered some losses.
- Nifty50 slipped below 24,700, trading at 24,656.30 (down 56 points or 0.23%) at 11:05 AM.
- Sensex was at 80,571.86 (down 215 points or 0.27%).
Why is the market down?
According to Dr. V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments:
- The new 50% US tariffs will hurt market sentiment in the short term.
- However, investors believe it’s a temporary issue that will likely be resolved soon.
- Comments from the US Treasury Secretary suggest that India and the US will eventually reach an agreement, which helps calm market fears.
What are the bigger concerns?
- The real challenges for the Indian market are high stock valuations and weak earnings growth.
- Strong buying by domestic institutional investors (DIIs) is supporting the market even as foreign investors (FIIs) sell.
- Experts suggest shifting money from overvalued small-cap stocks to large-cap companies focused on domestic consumption.
Global market cues
- In the US, the S&P 500 hit a record high on Wednesday before Nvidia’s results. But Nvidia’s revenue forecast disappointed investors, pulling its stock and US futures lower.
- The US dollar weakened as traders expect the Federal Reserve may cut interest rates soon, following comments from New York Fed President John Williams.
- Crude oil prices fell as markets weighed US fuel demand and the impact of tariffs on India’s Russian oil imports.
Fund flows
- Foreign investors (FIIs) sold shares worth ₹6,516 crore on Tuesday.
- Domestic investors (DIIs) bought ₹7,060 crore, helping the market stay stable.
