It’s a sea of red for the markets this morning. The weak global cues weighed on investor sentiment and the Nifty and Sensex are down sharply in early trade. What’s particularly important is that the Nifty is now trading close to the key 22,300 mark. Most analysts have identified this as the primary support zone for the markets in the near-term.
The Nifty IT Index is one of the big sectoral losers and the key stocks that saw maximum damage include Coforge, HCL Tech and Infosys. The broader markets are also under pressure and the BSE Smallcap and the BSE Midcap Indices are down over a percent each in morning trade.
Speaking on the market movement this morning, Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services pointed out that, “Stock markets dislike uncertainty, and uncertainty has been on the rise ever since Trump was elected the US president. The spate of tariff announcements by Trump has been impacting markets and the latest announcement of additional 10% tariff on China is a confirmation of the market view that Trump will use the initial months of his presidency to threaten countries with tariffs and then negotiate for a settlement favourable to the US. How China responds to the latest round of tariffs remains to be seen. Even now the markets have not discounted a full blown trade war between the US and China. It is likely to be avoided. However, the uncertainty element has increased as reflected in the sharp spike in CBOE volatility index to 21.13.”
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US President Donald Trump has confirmed that the whopping 25% tariffs on Mexico and Canada will come into effect from March 4. Trump also announced that imports from China will also see a levy of additional 10%. Earlier after the announcement, the US President had given a 1-month time but according to him as ‘drugs are still pouring into our country’ he has gone ahead with the tariff hike. According to the Reuters report, Trump told reporters that the fresh tariffs on “Chinese imports would stack on top of the 10% tariff that he levied on February 4 over the fentanyl opioid crisis,
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