MUMBAI: Despite the hype, Modi's visit to Washington under President Trump’s second term was a dull affair for Indian stock markets on Friday, but high hopes are there, as market gurus opine, “It’s not just hugs and laughs, it’s much more”, something big is in the air.
POINTS TO PONDER
Investors wealth erodes Rs 25.31 lakh cr in 8 days
BSE Sensex lost 3.3 per cent in eight days, Nifty plunged 3.4 per cent
Trump is unlikely to back down on reciprocal tariffs for the time being
Modi-Trump friendliness augurs well for India, India-US mega partnership, a ray of hope
An increase in bilateral trade to USD500 billion will promote growth, and job creation
All US trading partners must follow a ‘business-first affair policy’ to balance trade war
Modi-Elon Musk dialogues on AI, promising, expected quality Indian IT companies to benefit
Investors not bullish on Q4 corporate earnings
The magnitude of tariffs, and their actual impact on economy still uncertain
Rupee depreciation is a concern
Modi's US Visit
“Trump and Modi are likely to be winners, but what happens next is both seriously important and hard to understand. ‘America First’ trade agenda was an expected modes operandi, and India too.
It was a warm welcome as the Indian diaspora in Washington greeted Prime Minister Narendra Modi on Thursday raising slogans, ‘Bharat Mata ki Jai', ‘Vande Mataram’ and ‘Modi Modi’. PM must have felt hot in winter as the diaspora has one million hopes on Indo-US relations,” a Washington-based Indian investor and economic advisor told Free Press Journal.
PM Narendra Modi emplanes for Delhi after concluding his US visit on February 12-13 and meeting with US President Donald Trump (Screengrab) | X/@ANI
Indian Markets Decline
“Trump and Modi are on the right track. The trade imbalances of US with countries, mainly China is huge. As far as India is concerned, the US has a trade deficit of USD 35.31 billion in goods in 2023-24, and to bridge this gap, a reciprocal tariff is one of the promising options for Trump. All US trading partners must follow a ‘business-first affair policy’ to balance trade war,” he said.
An increase in bilateral trade to USD500 billion, investors said, will promote growth, and job creation.
Benchmark indices continued their downward trend to eighth day in a row on Friday as FIIs remained heavy sellers and investor sentiment and market undercurrent witnessed unpredictability. The 30-share BSE Sensex fell 199.76 points, and closed at 75,939.21.
During the day, it lost 699.33 points in total at 75,439.64. The NSE Nifty lost 102.15 points at 22,929.25. FIIs had offloaded equities worth Rs 2,789.91 crore on Thursday, and the trend continued on Friday as well.
Black Gold In-Play
Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services: “From the market perspective, early indications from the Modi-Trump talks are positive. The threatened reciprocal tariffs have been delayed, leaving room for further negotiations and a possible deal. India’s willingness to buy more oil and gas from the US can help reduce the trade deficit with the US. Even though Trump is unlikely to back down on reciprocal tariffs, India is treated as a friendly country and the bonhomie between the two leaders augurs well for India.
“The oversold market can bounce back in the near-term but a sustained rally is unlikely since the FIIs continue to be on sell mode. Only a decline in dollar and US bond yields will turn the FIIs into buyers. So watch out for this space. The ongoing divergence in the market’s preference in favour of largecaps over mid and small caps will continue. Some of the top holdings in small cap mutual funds now are mega caps."
Market men said: “Investors in general are not bullish on Q4 corporate earnings. The magnitude of tariffs, and their actual impact on economy still remain unclear, and the depreciation of the rupee is a concern for domestic investors.”
The 30-share BSE Sensex fell 199.76 points, and closed at 75,939.21. | Representative Image
Increasing Market Access
Asian markets, Seoul, Shanghai, and Hong Kong closed higher while Tokyo ended lower. European markets, however, displayed a mixed trend. US markets, ended higher on Thursday on positive expectations of Trump’s ‘America First’ polices.
“India and the US are believed to be determined to double the bilateral trade to USD 500 billion by 2030. Talks for a bilateral trade agreement have started, aimed at bringing down duties and increasing market access, but their actual impacts on various sectors of the Indian economy will be known only after an agreement between the two countries,” analysts said here.
India’s defence trade is expected to be increased by many billions of dollars from this year as the US will export warplanes and military equipment to India, and it’s is also expected to pave the way for India to export accessories to the US.
