Sensex and Nifty
The stock market is witnessing a sharp decline on Monday. In this, investors have seen a decline of about Rs 5 lakh crore. This Pressure was seen in the Asian Market as well along with the Indian market.
After Finance Minister Nirmala Sitaraman introduced the budget, the market declined in the first session of trading. The Nifty Sensex opened with a decline. The same thing was seen in the Asian Markets. The US market also declined. The Dow also slipped 750 points. The main reason was Trump’s actions. Trump has imposed tariffs on three countries, which has affected Asian Markets as well.
Trump has imposed a 25% tariff on Canada and Mexico, while China has imposed a 10% tariff. In retaliation, Canada has also decided to impose a 25% tariff on US goods worth $155 billion. Mexico is also planning something similar.
Nearly Rs 5 lakh crores lost
After opening with a decline on Monday, at one point the Sensex slipped 695 points or 0.91% to trade at 76,812. Nifty also saw a decline of 211 points or 0.90% and the index was seen trading at 23,271. After this decline in the domestic stock market, the total market capitalization (BSE market cap today) of all the companies listed on the BSE saw a decline of Rs 4.63 lakh crore.
Crude oil is also witnessing a rise. There is also a risk of disruption in the supply of crude oil due to the Trump Tariff. In such a situation, there was a rise in the price of crude oil. However, due to low fuel demand in the US, there was not that much rise in it. Brent crude oil has crossed $ 77 per barrel with a gain of about 1%. At the same time, WTI crude oil is close to $ 74 per barrel.
Reasons
Tariff war between Countries Canada, Mexico, China
The biggest reason is that tariffs have been imposed by the US on Canada, Mexico, and China. There are concerns that this tariff war will affect global growth. Trump has decided to impose tariffs on these three countries while attacking Fentanyl drugs and migration. Trump had also mentioned this in his election promise. Canada and Mexico have also prepared to retaliate. China has talked about challenging it in the World Trade Organization (WTO).
US Dollar on the top
In foreign trading, the US dollar was seen reaching a record high against China’s currency Yuan (Yuan vs. dollar). Against the Canadian dollar, it has reached its highest level since 2003. Mexico’s currency Peso has also reached the upper level of 2022 against the dollar. Meanwhile, the Indian rupee (Rupee vs. dollar) also opened above 87 against the dollar with a weakness of 42 paise. The dollar index has also reached around 110.
US Treasury Yield up to 4.274%
The US Treasury bond yield has returned to its upward trend. The 2-year US Treasury yield has risen 3.6 basis points to 4.274%, which is a one-week high. There is a risk of rising inflation in the US amid tariff concerns and in such a situation, the possibility of delay in rate cuts has increased. The increase in treasury yield is considered negative for emerging markets like India. In fact, due to the increase in treasury yield, these emerging markets are more attractive than risk returns.
Disclaimer: Please take expert advice before making any decision.