Mumbai:
The Indian stock market has become the first in the world to successfully eradicate all the damage initiated by Donald Trump’s mutual tariff declaration. The stock market in India’s financial capital Mumbai today ralled the trading after a long weekend – Monday was a holiday for Ambedkar Jayanti.
The National Stock Exchange or NSE Nifty 50 index today increased by 2.4 percent in Mumbai during the trading session, which brings back the index to the level on 2 April, when President Trump signed an executive order on the tariff.
According to a report by Bloomberg, global investors are telling Indian markets as “relatively safe” amidst global instability at Trump’s friends and enemies equally punitive steps.
How is India different
Those mutual tariffs, however, are currently on “break” for all countries except China – US ‘Primary. The conflict between the two largest economies and the world’s two largest manufacturers is sufficient to brace for the impact for global markets.
With a population of over 1.4 billion people and large domestic investors, Indian markets have a better ability to face potential global recession, stating in the report.
Talking to Bloomberg, Gary Dugan, CEO of the Global CIO office, said, “We live overweight in our portfolio.” He explained that the Indian market, which is “supported by good domestic development and aided by a possible diversification of supply chains away from China, Indian equity is seen as a safe bet in the moderate period.”
China at a weapon distance
Indian markets have placed Chinese investment in the Gulf for a long time, and any major impact on China has a minimum impact on India than other markets in the world. With the fast growing trade war between the US and China, global headlines have come into the Indian markets and India’s investment destination.
India’s manufacturing sector is also growing at a fast pace, and the country is now seen as an alternative manufacturing center for China. While Beijing has taken the anti -anticonvolent route and opted for a business war with Washington, New Delhi has adopted a lot of concurrent tone. India and the United States are in an advanced phase for a ‘win -win -win’ trade deal – a step seen by the rest of the world as far more adaptive and flexible stand than China.
Revival of Indian markets
India’s stock market revival follows a decline of about 10 percent in equity benchmarks in the previous two quarters. President Trump had reached the peak of the celloff after the tariff ‘bomb’ is demolished, but some other factors included the development of development as well as a marginal dip in high evaluation.
According to Bloomberg, Overseas Fund has sold more than $ 16 billion local equities on a net basis this year. This is compared to 2022 – the year with a maximum return of $ 17 billion.
Supporting Trump’s tariff step, the Reserve Bank of India or RBI – India’s central bank – has reduced interest rates, and economists believe that it can continue to do so to combat any punitive measures. It has also created on the trust of investors in the country.
Oil prices in the international market are another cause of positive investor spirit in India, a major raw importing nation.
What data shows
According to data compiled by Bloomberg, “The Nifty 50 benchmark is currently trading at 18.5 times its 12 -month forward earnings, compared to an average of the five years of its 12 -month forward earning at the end of September and at its peak in September.”
Another data compiled by the news agency suggests that India is better untouched by tariffs, only 2.7 percent of the total American imports, 14 percent of the China and Mexico at 15 percent.
(Input and data by Bloomberg)