BSE Sensex down 300 points as Trump imposes protectionist import tariffs
While the market still debates the effect of Trump admin's newly imposed import tariff on steel and aluminum, Indian markets slip in-line with global weakness post the announcement.
President of United States, Donald Trump imposed a 25 per cent import duty on steel and 10 per cent duty on aluminum, this led to another global sell-off on Friday, when Indian markets were closed on the occasion of Holi. Trump's move is expected to trigger a round of retaliatory action from strong economies including China and Canada, while others might also follow the US suit of imposing similar protectionist import tariff. Economists believe this move could trigger a fresh bout of trade wars globally.
Many domestic fund houses believe that US import tariff will only lead to temporary disruption in some geographies, while the global outlook for steel and aluminum remains unchanged. Also, India's exports of steel and aluminum to US is significantly low with steel at around 2.4%, while aluminum is about 2%. But due to restrictions in the US, there might be dumping of these metals in the Indian market, especially from suppliers such as China, Korea, Russia and Japan, thereby hurting domestic producers.
Meanwhile, TataSteel, Hindalco, Vedanta were among the biggest losers in trade on Monday. Hindalco closed at Rs. 230.55 per share, down by 4.26 per cent, Vedanta was at Rs. 315.00, down 2.55 per cent and Tata Steel was at Rs. 655.35 per share, down by 2.95 per cent. The benchmark indices BSE Sensex closed at 33,746.78, down by 300.16 points or 0.88 per cent, while Nifty50 was at 10,358.85, down 99.50 points or 0.95 per cent.