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Benchmarks continue to trade lower ahead of US tariff announcement
Apr-01-2025

The Indian equity markets continued to trade lower in late afternoon session as the uncertainty surrounding US president Trump’s trade policies ahead of April 2 weighed on investor sentiments. Traders remained cautious after Trump indicated that the reciprocal tariffs which are to be announced will include all nation, not just a smaller group of 10 to 15 countries with the biggest trade imbalances. Besides, recent reports of rising possibility of recession in US economy in upcoming time has kept the investors on edge. The rising uncertainty about global trade and looming geopolitical tensions have dampened the market sentiments encouraging to mobilize the funds to safer investments such as bonds and precious metals.

On the global front, Asian equity markets are trading mostly in green as traders awaited more details on U.S. President Donald Trump's reciprocal tariff announcements. European equity markets were trading higher after Data from Eurostat indicated that euro area inflation rate dropped to 2.2% in March from 2.3% in February. Core consumer prices increased 2.4% in March over the same month in the previous year. Meanwhile, a separate data from Eurostat showed the unemployment rate in the Euro Area decreased to 6.1% in February from 6.2% in January of 2025.

The BSE Sensex is currently trading at 76059.61, down by 1355.31 points or 1.75% after trading in a range of 75912.18 and 77487.05. There was 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index down by 1.01%, while Small cap index was up by 0.12%.

The only gaining sectoral indices on the BSE were Telecom up by 2.21% and Oil & Gas up by 0.61%, while Realty down by 2.85%, Consumer Durables down by 2.32%, IT down by 2.27%, TECK down by 1.71%, Healthcare down by 1.50% were the top losing indices on BSE.

The sole gainer on the Sensex were Indusind Bank up by 4.93%. On the flip side, HCL Technologies down by 3.44%, Infosys down by 3.07%, Bajaj Finserv down by 3.07%, HDFC Bank down by 3.05% and Bajaj Finance down by 2.70% were the top losers.

Meanwhile, Finance ministry in its latest report has said that India's external debt increased by 10.7 per cent to $717.9 billion at the end of December 2024 from $648.7 billion in December 2023. On a quarter-on-quarter basis, there is a 0.7 per cent increase in external debt from the level of $712.7 billion at the end of September 2024. The external debt to GDP ratio stood at 19.1 per cent at the end of December 2024, against 19 per cent in September 2024.

According to the report, the valuation effect is due to the appreciation of the US dollar vis-a-vis the rupee and other major currencies, such as the yen, the euro and Special Drawing Rights (SDR), amounting to $12.7 billion during the quarter ended December 2024. Excluding the valuation effect, the increase in external debt would have been $17.9 billion quarter-on-quarter against $5.2 billion at the end of December 2024 over September 2024. US dollar-denominated debt remained the largest component of India's external debt, with a share of 54.8 per cent in end-December 2024, followed by Indian Rupee (30.6 per cent), Japanese Yen (6.1 per cent), SDR (4.7 per cent) and Euro (3 per cent).

The report said the outstanding external debt of the central government declined while that of the non-government sector increased at December-end 2024 over its level at September-end 2024. The share of outstanding debt of non-financial corporations in the total external debt was 36.5 per cent, followed by deposit-taking corporations (except the central bank) (27.8 per cent), central government (22.1 per cent) and other financial corporations (8.7 per cent). Loans were the largest component of external debt, with a share of 33.6 per cent, followed by currency and deposits (23.1 per cent), trade credit and advances (18.8 per cent) and debt securities (16.8 per cent). Debt service (principal repayments plus interest payments) stood at 6.6 per cent of current receipts at December-end 2024 compared to 6.7 per cent at September-end 2024.

The CNX Nifty is currently trading at 23154.20, down by 365.15 points or 1.55% after trading in a range of 23136.40 and 23565.15. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 4.99%, Trent up by 4.65%, Bajaj Auto up by 1.54%, HDFC Life Insurance up by 1.23% and JIO Financial Services up by 1.18%. On the flip side, HCL Technologies down by 3.62%, Bajaj Finserv down by 3.23%, HDFC Bank down by 3.16%, Infosys down by 3.13% and Hindalco down by 2.81% were the top losers.

Asian markets are trading mostly in green; Hang Seng advanced 87.26 points or 0.38% to 23,206.84, KOSPI increased 40.27 points or 1.6% to 2,521.39, Nikkei 225 surged 6.92 points or 0.02% to 35,624.48, Taiwan Weighted added 584.27 points or 2.75% to 21,280.17 and Shanghai Composite strengthened 12.69 points or 0.38% to 3,348.44, while Straits Times fell 1.67 points or 0.04% to 3,970.76.

European markets were trading higher; UK’s FTSE 100 increased 67.66 points or 0.78% to 8,650.47, France’s CAC rose 69.08 points or 0.88% to 7,859.79 and Germany’s DAX gained 272.72 points or 1.22% to 22,436.21.
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