Winning Bizness Desk

Mumbai. Global financial markets experienced significant turmoil on April 16, 2025, following the United States' announcement of imposing tariffs up to 245% on Chinese imports. This aggressive trade measure, attributed to China's retaliatory actions, has intensified fears of a deepening trade war between the world's two largest economies. The White House's decision, encompassing a 125% reciprocal tariff, a 20% penalty related to fentanyl trafficking concerns, and additional Section 301 tariffs ranging from 7.5% to 100%, has been met with global apprehension.

Goods trade may face steep decline

The World Trade Organization (WTO) has warned that these measures could reverse global trade growth, projecting a potential decline of 0.2% in goods trade for 2025, down from an earlier forecast of 2.7%. Investor sentiment has reached a 30-year low, with a Bank of America survey indicating that 80% of fund managers view the trade war as the primary risk to the global economy. Major stock indices worldwide have responded negatively: Hong Kong's Hang Seng dropped 1.91%, Japan's Nikkei 225 fell 1.01%, and South Korea's KOSPI declined 1.21%.

India's stock markets have demonstrated resilience

Contrastingly, India's stock markets have demonstrated resilience. The BSE Sensex rose by 309.40 points to close at 77,044.29, while the NSE Nifty increased by 108.65 points, settling at 23,437.20. This marks the third consecutive day of gains for Indian equities. Analysts attribute this stability to India's limited exposure to US-China trade tensions, robust domestic fundamentals, and recent foreign institutional investments amounting to ₹6,065.78 crore.

As global markets grapple with the repercussions of escalating trade disputes, India's economic steadiness offers a glimmer of optimism amid widespread uncertainty.

Recent global market developments and India's performance:

1. US Imposes Steep Tariffs: The U.S. announced tariffs up to 245% on Chinese imports, escalating trade tensions.

2. WTO Predicts Trade Decline: The WTO warns these tariffs could reverse global trade growth in 2025.

3. Investor Sentiment Plummets: Investor confidence hits a 30-year low amid trade war fears.

4. Global Markets React Negatively: Major indices like Hang Seng and Nikkei 225 experience significant declines.

5. India's Markets Show Resilience: Contrary to global trends, India's Sensex and Nifty indices record gains.

6. Foreign Investment Inflows: Foreign Institutional Investors inject substantial capital into Indian equities.

7. India Seen as Safe Haven: Amid global volatility, India emerges as a stable investment destination.