Stock Market Opens Lower as Trump Imposes Steep Tariffs on Steel and Aluminium Imports
Stock market opens lower as Donald Trump announces 25% tariffs on steel and aluminium imports. Sensex and Nifty decline, impacting key sectors. Read more on market trends.
Mumbai: The Indian stock market opened lower on Tuesday after US President Donald Trump announced a 25% tariff on all steel and aluminum imports into the United States, with no exceptions or exemptions.
The move has sent shockwaves through global markets, impacting investor sentiment and raising concerns over trade tensions.
At around 9:32 AM, the BSE Sensex plunged 172.29 points (0.22%) to trade at 77,138.51, while the Nifty 50 declined 56 points (0.24%), settling at 23,324.80.
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Impact on Indian Steel Industry
The Indian Steel Association (ISA) has expressed deep concern over the US government’s decision to impose tariffs, urging the Indian government to negotiate the removal of anti-dumping and countervailing duties on Indian steel exports.
According to the ISA, the new tariff is expected to reduce steel exports to the US by nearly 85%, potentially flooding the domestic market with excess supply and triggering a price slump.
Sectoral Performance: Market Reacts to Global Uncertainty
Key sectors witnessed a downturn in early trading. Eicher Motors and Apollo Hospitals emerged as the biggest losers in the Nifty following their disappointing Q3 financial results.
On the National Stock Exchange (NSE):
- Nifty Realty and Nifty Auto indices recorded the sharpest declines.
- Nifty Media and Nifty Pharma also slipped, reflecting investor caution.
- Nifty Metal, which includes steel and aluminum companies, saw mixed performance as traders assessed the long-term impact of the US tariffs on Indian exports.
Market Sentiment and Technical Analysis
Analysts suggest that the sharp decline in the market indicates a cautious sentiment, driven by global economic uncertainties and the lack of strong domestic triggers.
According to technical experts, the Nifty has formed a bearish candlestick on the daily charts, signaling a negative outlook. The index faces key resistance at 23,460, and a breakout above this level could push gains towards 23,550 and 23,700. Conversely, if Nifty fails to sustain above 23,300, it may test lower support levels at 23,150 and 23,000.
Foreign and Domestic Institutional Activity
Institutional flows are playing a crucial role in dictating market trends. On February 10:
- Foreign Institutional Investors (FIIs) sold equities worth ₹2,463 crore.
- Domestic Institutional Investors (DIIs) bought equities worth ₹1,515 crore.
These transactions indicate continued selling pressure from foreign investors, while domestic institutions are attempting to cushion the market impact.
Expert Opinions on Market Trends
Financial analysts and market experts have advised traders to maintain caution and wait for a clearer confirmation of market trends before making fresh investments. Aakash Shah from Choice Broking noted:
“The developments in global markets and uncertainties regarding tariffs will be key drivers in shaping the market tone. Investors should watch for further policy responses and institutional activities before taking new positions.”
Global Market Reactions and Trade Concerns
The US decision to impose protectionist tariffs has already started to affect international markets. Asian and European stock indices also opened lower, with concerns that the US might further escalate trade restrictions in other key sectors.
- The Dow Jones Industrial Average (DJIA) slipped in pre-market trading, reflecting concerns over possible retaliatory tariffs from affected nations.
- European steelmakers and auto companies also recorded losses, anticipating increased costs and supply-chain disruptions.
- The Shanghai Composite Index and Japan’s Nikkei 225 saw declines as well, indicating broader concerns over the implications of a global trade war.
Government Response and Future Outlook
The Indian government is expected to hold discussions with US trade representatives to seek possible exemptions or relaxations in the tariff policy. Additionally, domestic steel manufacturers may look at diversifying their export markets to reduce reliance on the US.
