Stocks market expected to open lower today after erasing Trump tariff-induced losses

With the NSE Nifty 50 Index climbing as much as 2.4%, India also became the first major equity market globally to erase the tariff-induced losses.

The Indian stock market is expected to open lower on Wednesday, a day after seeing a rebound from aftereffects of Donald Trump's tariffs, with global investors hoping it to be a relative safe haven amid the volatility created by US President's reciprocal duties.

In comparison, a broader gauge of Asian equities is still down more than 3% since the tariff announcements, meaning that India’s domestic economy is seen as being able to withstand a potential global recession better than many peers, who face higher tariffs. (Representational image)

The stock market on Tuesday closed with the Sensex reaching 1,577.63 points in the green or 2.10 per cent up, hitting 76,734.89, while the Nifty was up by 500 points or 2.19 per cent in the green, closing at 23,328.55.

Stock market expected to open lower

Indian benchmark indices Sensex and Nifty are expected to open slightly lower on Wednesday, pausing after two sessions of strong gains driven by a relief rally, according to a Reuters report, which added that investors are cautious, awaiting further clarity on global trade dynamics.

As of 7:50 am on Wednesday, Gift Nifty futures were trading at 23,273, indicating a 0.2 per cent dip for the Nifty 50 from Tuesday’s close of 23,328.55.

Analysts cited in the report remained wary of emerging supply chain risks tied to the ongoing US-China trade tensions.

Across Asia, markets were largely in the red, led by declines in China and Hong Kong. Japan’s Nikkei also slipped, weighed down by chip stocks, after Nvidia revealed fresh US export restrictions on a key chip to China.

With the Nifty having climbed as much as 2.4 per cent intraday, India also became the first major equity market globally to erase the tariff-induced losses, according to a Bloomberg report.

In comparison, a broader gauge of Asian equities is still down more than 3 per cent since the tariff announcements, meaning that India’s domestic economy is seen as being able to withstand a potential global recession better than many peers, who face higher tariffs.

“We remain overweight India in our portfolios,” the report quoted Gary Dugan, chief executive officer of The Global CIO Office. Supported by good domestic growth and aided by a likely diversification of supply chains away from China, Indian equities are seen as a safer bet over the medium term, he said.

One of the reasons behind this is that India accounted for just 2.7 per cent of total US imports last year, as compared to 14 per cent for China and 15 per cent for Mexico, according to Bloomberg data.

“India is not insulated, but relatively better positioned amid the risk of a trade war given its low direct revenue exposure to US, particularly on the goods side,” the report quoted Rajat Agarwal, a strategist at Societe Generale SA as having said. “Indian equities should also benefit if oil prices sustain at low levels.”

The rally also comes as investors see India as an alternative manufacturing hub to China amid the intensifying Sino-American trade war.