Volatility Strikes Indian Stock Markets Amid US Tariff Concerns

Indian stock indices closed slightly in the red due to US tariff worries and a weak Rupee. Sensex and Nifty showed strong weekly gains despite ongoing global economic uncertainties. US trade policies and domestic economic indicators are influencing market behavior, with calls for cautious investment strategies amid volatility.

After experiencing a tumultuous day, Indian stock indices concluded slightly lower, primarily due to concerns over US tariffs and a diminishing Rupee. The Sensex settled at 74,115.17 points, marking a 217.41-point or 0.29% decrease, while the Nifty ended at 22,460.30 points, falling by 92.20 points or 0.41%.

Last week, Indian markets took a breather following a persistent slump, with the Nifty 50 posting its best weekly performance in three months. The Sensex recorded its highest weekly increase since January. Despite this, global market challenges continue to impact sentiment due to rising US unemployment and tariff uncertainties, according to Vinod Nair, Head of Research at Geojit Financial Services, who warned of impending volatility.

Nair noted that domestic factors are encouraging investors to cautiously accumulate undervalued stocks for short-term gains while remaining optimistic about long-term prospects. Investors will closely monitor economic indicators this week, including US and India CPI data, for any signs of reduced volatility. Global stocks are encountering headwinds amid heavy selling as tariffs spark fears of a trade war. The US's tariff policy, reiterated by President Donald Trump, is adding to investors' concerns, compounded by foreign investment outflows from India.

The Sensex is now approximately 12,000 points below its peak, having declined about 6% this year amid weak domestic growth and corporate earnings. In previous years, Sensex and Nifty saw growth, but challenges such as sluggish GDP growth, foreign fund withdrawals, and rising food prices continue to deter investors in 2024.

(With inputs from agencies.)