NEW DELHI: With the US and China escalating their tariff war through Tuesday and Wednesday, stock markets in India and the world took another beating. The benchmark Sensex slumped more than 350 points, in line with wider global market meltdown following the two economic superpowers’ fresh round of import tariff announcements.
The developments have brought investor sentiments plunging, especially since the last few weeks have seen some glimmers of hope that the acrimony would stop short of a trade war after China and the US began negotiations.
However, with the US releasing its list of 1,300 Chinese products which will attract net extra tariffs worth around $50 billion on Tuesday, China retaliated with its own list of 106 new American products that will attract higher import duties. With the earlier list of 128 products, China’s announced import duties are estimated to be worth close to a cumulative $53 billion. The Sensex ended 351.56 points or 1.05 per cent down at 33,019.07 after China’s announcement, while the Nifty closed at 10,128.40, down by 116.60 points, or 1.14 per cent. The looming RBI monetary committee meet also dampened sentiments.
“Markets slid two per cent from the day’s high due to looming trade war tensions and caution ahead of RBI policy meet. Global market volatility continued to give a ripple effect to the market despite gradual recovery in domestic economy and moderation in inflation. RBI’s policy is likely to support near-term sentiment while clarity on earnings growth and monsoon will give more transparency in direction,” said Vinod Nair, Head of Research, Geojit Financial Services.Globally, European markets were trading in the negative zone in early deals. Frankfurt’s DAX fell 1.12 per and France’s Paris CAC was down 0.40 per cent. London’s FTSE declined 0.42 per cent.