The stock market again witnessed a sharp decline on Friday, after the previous day’s massive decline that wiped out investors’ wealth worth over Rs 8 lakh crore. The decline continues even on the last trading day of the week. At 2:50 pm, BSE Sensex was trading at 83,500, down 678 points. Nifty had fallen 210 points to 25,666.
Barring 9 stocks in BSE top 30, the remaining 21 stocks were trading down. NTPC witnessed a decline of 2.48 per cent, while shares like ICICI Bank and Sun Pharma were trading down 2 per cent. Sector wise, the most affected sectors are realty, consumer durables, private banks, IT and healthcare. Many reasons for this decline have emerged.
500% effect of Trump tariff
The biggest impact has been due to US President Donald Trump’s support to the proposal to impose tariffs up to 500 percent. If this proposal is passed, America can impose tariffs of up to 500 percent on importing countries, including Russia. This has shaken the market environment. Its impact is visible more on many export-oriented companies.
India-US trade agreement stalled
This tariff proposal has increased trade tensions. US Commerce Secretary Howard Latnick claimed in an interview that the trade deal with India could not be finalized because Prime Minister Narendra Modi did not call President Donald Trump. Latnik said that the entire agreement was ready, but it was necessary for Modi to call Trump to finalize it. He said that everything had been decided. An agreement was reached between the two countries; Modi just wanted to talk to Trump. But he did not call. He felt uncomfortable doing so. Modi did not call. We have signed trade agreements with Indonesia, Philippines and Vietnam. We had hoped that before that he would also sign a trade agreement with India.
American court decision
VK Vijayakumar, Chief Investment Strategist, Geojit Investments, said that after the sharp fall in the market yesterday due to the possibility of imposition of almost 500 per cent tariffs on India under the provisions of the Russia Sanctions Act approved by President Trump, the focus of the market today is on the upcoming verdict of the US Supreme Court on the legality of Trump’s tariffs. Experts say that there is every possibility of a decision against Trump, but the important question is whether this decision will partially reverse the tariffs or declare them completely illegal. Market reaction will depend on these details.