New Delhi: Stock markets across the globe tanked sharply on Monday, in the wake of fears that Trump’s policies on reciprocal tariffs may lead to recession. On Monday, the market cap of BSE-listed firms fell sharply by Rs 14,09,225.71 crore to Rs 3,89,25,660.75 crore (USD 4.54 trillion) in a single day led by the carnage in global markets.
Domestic markets however staged a strong comeback on Tuesday, with Investors’ kitty swelling by Rs 7.32 lakh crore.
Given the volatility in stock markets across the globe, should investors brace up for further rocky path or will there be calm anytime soon?
Vinod Nair, Head of Research, Geojit Investments Limited has said that India is well-positioned for outperformance in an exclusive chat with Reema Sharma of Zee News. Excerpts…
Stock markets have bounced back from the Maniac Monday (Tuesday opening), but is the fear still looming large?
These are technical bounce backs from the knee-jerk sell-off as the Asian market improved today. Its sustenance will depend on the further development of the trade war. Positivity triggered as news developed that many countries have approached the US to discuss a cut in tariffs for US exports. This is expected to ease the trade war. And India holds an edge, being already in discussion with the US to deal a bilateral trade agreement and placed in the lower bracket of the reciprocal tariff list.
There are fresh threats by the US to impose a punitive tariff against China. Will global market carnage continue?
The future trend of the global market will depend on an ease in trade wars. Retaliation is expected to make the situation worse, as the US can impose further trade sanctions. This is expected to impact the world economy, increasing the risk of recession in 2026. Improvement in bilateral agreements with the US & others and reduction in tariffs towards zero per cent will revoke the tantrum on the global stock market.
How are Indian investors positioned amidst the heightened volatility in Global markets?
Indian investors are advised to stay calm and avoid panic selling amidst global market volatility. Historically, India has shown resilience during global sell-offs, and in the current scenario, while the US and Japan markets are down by over 10%, India is down by only 4%. With a strong domestic economy, lower tariffs, and stable trade agreements, India is well-positioned for outperformance. The market valuation has corrected to its long-term average, making it an opportune time for long-term investments. Investors should maintain their portfolios, continue SIPs, and consider buying on dips, especially in domestic-oriented sectors like Finance, Consumption, Cement, and Infrastructure.
