Markets Rebound from Tariff Shock as Indian Indices Close Slightly Lower

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The Indian stock market closed Thursday’s session with modest losses, recovering from early declines sparked by U.S. President Donald Trump’s surprise announcement of a 25% tariff on Indian exports. Additional penalties related to India’s energy dealings with Russia further unsettled investors. The benchmark indices ended the day just below previous levels, reflecting cautious sentiment amid geopolitical tensions.

The S&P BSE Sensex, a key stock market index in India representing 30 well-established companies, finished at 81,185.58, down 0.36%. Similarly, the Nifty 50 comprising the top 50 companies listed on the National Stock Exchange (NSE)  closed at 24,768.35, slipping 0.35% and falling below the psychologically important 24,800 mark. The Nifty Bank index, which tracks the performance of major banking stocks, also declined by 0.34% to 55,961.95.

Thursday’s trading session was marked by sharp early losses following President Trump’s tariff declaration, which targets Indian exports with a 25% duty. The announcement also included an additional penalty connected to India’s ongoing energy trade with Russia, further pressuring market sentiment. Despite this, markets recovered from the lows as investors digested the news and weighed the broader economic impact.

The BSE (Bombay Stock Exchange) market capitalization, the total market value of all listed companies, contracted by approximately Rs 5 lakh crore (Rs 5 trillion), underscoring the significant investor reaction to the tariff measures. This contraction reflects the immediate impact on investor confidence, though the market showed resilience by closing off its lowest levels of the day.

In summary, the Indian equity markets faced headwinds from international trade tensions and geopolitical developments but managed to stabilize before the close. Investors continue to monitor the evolving trade dynamics between India and the United States, as well as broader global factors that could influence market performance in the near term.