Author: Eqwires

Bears on Dalal Street have pushed the market capitalisation (market-cap) of Indian companies to tumble nearly ₹30 trillion from their recent peak levels in March 2025. 

The benchmark indices — Nifty50 and 30-stock Sensex — posted a recovery of over 8 per cent since their lows hit in September 2024. From March 24, all this recovery was dented as US President Donald Trump’s tariff threats came into focus. Since the recent peak on March 24, the market cap of listed companies in India has plunged by ₹29.03 trillion, according to data from the BSE. 

In the Nifty 500 universe, Central Bank of India, KPIT Technologies, Anant Raj, National Aluminium (NALCO) and UCO Bank were among the top losers in terms of market-cap. Among big names, metal companies like Vedanta, Hindustan Copper and Hindalco Industries lost over 20 per cent in market-cap. Tata Motors and Tata Steel also lost nearly 20 per cent of their market-cap from March 24.

Only 40 companies in the Nifty 500 index saw their market increase in this period, and 13 among them were less than a 1 per cent rise. Tata Consumer Products, Aster DM Healthcare, BSE, and Vardhman Textiles saw their market-cap gain the most from March 24. Tata Consumer’s market cap rose by 7 per cent while the other three company’s market cap advanced slightly by over 10 per cent.   

On Monday, the key gauges registered their biggest fall since June 4 last year as concerns over growth and fallout from US tariffs deepened the prevailing risk-off sentiment. After Trump hit China with a 54 per cent tariff to cripple exports to the US, Beijing retaliated with 34 per cent tariffs on all US imports.

Further, China restricted exports of seven types of rare earths, launched an anti-dumping probe into medical CT X-ray tubes from the US and India and imposed export controls on 16 US firms, among other measures. 

In addition to China, Canada announced 25 per cent retaliatory tariffs on some US-made vehicles while France’s Emmanuel Macron urged companies to pause US investments. All these add to global growth concerns, as pointed out by top brokerages. 

Analysts at BofA stay cautious on Indian equities as the tariffs act as an additional risk for markets. While the direct Impact of tariffs on India is limited, it could have a cascading impact, including potentially delayed capex decisions and impact credit growth, among others. “Given India’s rich valuations along with other concerns, we continue to stay cautious on Indian equities.”

India VIX surges 

During Monday’s session, India’s stock-market volatility gauge, India VIX, spiked 60 per cent as China’s retaliatory tariffs on US goods spooked traders. The spike in volatility came as the Sensex plunged 3,939 points in intraday trade to hit a low of 71,425.01, while the NSE Nifty50 breached the 21,800 mark to hit a low of 21,743. 

The last notable spike in the volatility index had occurred in August, when the unwinding of the Japanese yen carry trades had roiled Dalal Street along with global markets. Earlier, in June, the index had surged ahead of the Lok Sabha election results.

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Indian markets have been on edge over the last two sessions after US President Donald Trump’s reciprocal tariffs on over 180 countries, including India, rocked global markets. The US reciprocal tariff of 26 per cent on India is higher than expected, but is relatively lower than that levied on other Asian countries like China (34 per cent), Vietnam (46 per cent), Thailand (36 per cent), Indonesia (32 per cent) and Bangladesh (37 per cent) which compete with India for export share.

 While the Indian markets were visibly stable on Thursday, the sentiment took a beating on Friday after Donald Trump said he was planning tariffs on the pharma sector “like never before”. Consequently, the Nifty index tanked over 300 points to hit the day’s low of 22,921.60, whereas the Sensex index crashed 1,009 points intraday.

As analysts suggest investors to tweak their investment portfolios, focusing on domestic-economy lined stocks, Motilal Oswal Financial Services (MOFL) has listed out five stocks that investors could buy in April 2024. The brokerage has picked Varun Beverages, SRF, ICICI Bank, Indian Hotels, and Amber Enterprises as its focus ideas for the month. 

At 1:30 PM on Friday, April 4, Varun Beverages share was trading 1.61 per cent down at ₹535.25, SRF share price was down 1.11 per cent at ₹2,869.10, ICICI Bank up 0.49 per cent at ₹1,336, The Indian Hotels share was down 3.15 per cent at ₹804.85, and Amber Enterprises stock was down 4.20 per cent at ₹6,638.55. In comparison, the benchmark Nifty50 index was down 308.25 points or 1.33 per cent at 22,941.85. 

From a technical perspective, the immediate support for the Nifty index is at 23,150, followed by 23,000 zones, while resistance is at 23,400, followed by 23,550 zones. 

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President Donald Trump has spoken with representatives from India, Vietnam, and Israel to open talks on trade deals that may ease the impact of tariffs set to take effect next week, CNN reported on Saturday (IST). This outreach marks the first wave of diplomatic engagements since Trump announced blanket tariffs on more than 180 nations and reciprocal tariffs on Thursday. 

The reciprocal tariffs are scheduled to be enforced from 12:01 am ET on April 9 as part of Trump’s aggressive trade policy, which has imposed sweeping levies on 57 nations. While senior White House trade advisors Peter Navarro and Vice-President JD Vance have insisted that the measures signify a lasting realignment of global trade, other officials acknowledge Trump’s willingness to negotiate.

Mixed messages from Trump

Trump’s stance on the tariffs has been inconsistent. While he initially framed them as non-negotiable, he later hinted at possible compromises. Speaking aboard Air Force One, he claimed that multiple nations had reached out seeking deals, portraying the tariffs as a strategic tool for securing favourable agreements. 

“As long as they are offering something beneficial, we are open to discussion,” he said. “Look at TikTok as an example. China may want us to reconsider the tariffs in exchange for approving a deal. The tariffs give us significant leverage.”

“I wouldn’t want to be the last country to try to negotiate with Donald Trump,” the president’s son, Eric Trump, posted on X. “The first to negotiate will win—the last will absolutely lose. I have seen this movie my entire life.” 

However, the president also sent mixed signals, stating in a social media post on Saturday (IST), “Big business is not worried about the tariffs because they know they are here to stay. But they are focused on the BIG, BEAUTIFUL DEAL, which will SUPERCHARGE our economy. Very important. Going on right now!!!” 

Despite backlash from corporate America, global trading partners, and even some members of Congress, Trump has shown no indication of backing down from his tariff strategy. His administration insists that these measures are essential to reshaping international trade relations in favour of the United States.

Shifting tariff rates and confusion

India was initially subjected to a 27 per cent tariff, later revised to 26 per cent. This was not an isolated case as 17 other countries also saw their tariff rates altered by exactly one percentage point. Confusions stemmed from discrepancies between Trump’s announcement on April 2 and the initial order which noted different figures – leading the administration to align the order with the president’s original statement. 

Vietnam has been hit particularly hard, facing a 46 per cent duty on its exports to the US. Meanwhile, Israel, despite having preemptively eliminated all tariffs on American imports in a bid to avoid retaliation, was still subjected to a 17 per cent levy.

India is actively engaged in trade negotiations with the US in hopes of mitigating the impact of the tariffs. Exporters are optimistic that ongoing bilateral talks could yield concessions that might ease the burden on Indian industries. 

Global response, trade war

The tariffs have triggered widespread repercussions. Global markets tumbled for a second consecutive day after China announced retaliatory measures, including a 34 per cent duty on American goods effective from April 10. Beijing also declared its intent to file a complaint with the World Trade Organization and suspend exports of rare earth materials. 

The European Union, subjected to a 20 per cent tariff, has pledged a measured and unified response, while Japan, which faces a 24 per cent duty, has urged restraint.

South Korea’s acting president has called for dialogue, while Bangladesh plans to formally appeal to the United States Trade Representative.

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JPMorgan Chase & Co. said it expects the US economy to fall into a recession this year after accounting for the likely impact of tariffs announced this week by the Trump administration. 

“We now expect real GDP to contract under the weight of the tariffs, and for the full year (4Q/4Q) we now look for real GDP growth of -0.3 per cent, down from 1.3 per cent previously,” the bank’s chief US economist, Michael Feroli, said Friday in a note to clients, referring to gross domestic product. 

“The forecasted contraction in economic activity is expected to depress hiring and over time to lift the unemployment rate to 5.3 per cent,” Feroli said.

President Donald Trump’s announcement Wednesday of major tariffs on US trading partners around the world sent the S&P 500 index of US stocks to its lowest level in 11 months, wiping away $5.4 trillion of market value in just two trading sessions to close out the week.

JPMorgan’s forecast came alongside similar changes from other banks, which have been slashing projections for US growth this year since the tariff announcement. On Thursday, Barclays Plc said it expects GDP to contract in 2025, “consistent with a recession.” 

On Friday, Citi economists cut their forecast for growth this year to just 0.1 per cent, and UBS economists dropped theirs to 0.4 per cent.

“We expect US imports from the rest of the world fall more than 20 per cent over our forecast horizon, mostly in the next several quarters, bringing imports as a share of GDP back to pre-1986 levels,” UBS Chief US Economist Jonathan Pingle said in a note. “The forcefulness of the trade policy action implies substantial macroeconomic adjustment for a $30 trillion economy.”

‘Stagflationary Forecast’

Feroli said he expects the Federal Reserve to begin cutting its benchmark interest rate in June and proceed with rate cuts at each subsequent meeting through January, bringing the benchmark into a 2.75 per cent to 3 per cent range from the current 4.25 per cent to 4.5 per cent range.

Those cuts would come despite a rise in a key measure of underlying inflation to 4.4 per cent by the end of the year, from the current level of 2.8 per cent. 

“If realized, our stagflationary forecast would present a dilemma to Fed policymakers,” Feroli wrote. “We believe material weakness in the labor market holds sway in the end, particularly if it results in weaker wage growth thereby giving the committee more confidence that a price-wage spiral isn’t taking hold.” 

On Friday, Fed Chair Jerome Powell said “it feels like we don’t need to be in a hurry” to make any adjustments to rates. His comments followed the release of the latest monthly employment report from the Bureau of Labor Statistics, which showed robust hiring in March alongside a slight uptick in the unemployment rate, to 4.2 per cent.

Investors are betting on a full percentage point of reductions by the end of the year, according to futures.

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Shares of Crisil, Ashiana Housing, Siemens, Pervasive Commodities, and Enbee Trade & Finance are set to remain in focus during next week’s trading session due to corporate announcements. Among them, Crisil and Ashiana Housing will gain the spotlight as they will trade ex-dividend, while Pervasive Commodities and Enbee Trade & Finance will trade ex-date next week for the subdivision (stock-split). Meanwhile, Siemens will trade ex-date following the announcement of its spin-off. 

According to the data available on the BSE, credit rating agency Crisil has informed the exchanges that a meeting of the Board of Directors of the company will be held on Wednesday, April 30, 2025, to consider the payment of the first interim dividend for the financial year ending December 31, 2025. The company has already set the record date as Monday, April 14, 2025, for the said corporate actions.

Residential and commercial projects dealer Ashiana Housing has announced that its board has declared an interim dividend of 50%, i.e., ₹1 per equity share with a face value of ₹2 per equity share, for the financial year ending March 31, 2025. The dividend, the company said, will be paid on or before Monday, April 2025, to those members whose names are registered in the Register of Members of the company as of the record date, Friday, April 11, 2025. 

Besides these, integrated solutions provider Siemens will also remain in focus during the next week, as the company has announced the spin-off of its energy business to Siemens Energy India Limited (SEIL). In accordance with the scheme, SEIL will issue 1 fully paid-up equity share for every 1 share held in Siemens, based on a 1:1 ratio. The record date for determining eligible shareholders is set for Monday, April 7, 2025. Shareholders as of this date will be entitled to receive SEIL shares.

Meanwhile, diversified commercial services provider Enbee Trade & Finance has informed the exchanges that its board has announced the subdivision of every 1 equity share of face value ₹10.00 each into 10 equity shares of face value ₹1 each. The company has set Friday, April 11, 2025, as the record date for determining the eligibility of shareholders for the subdivision (stock-split). 

Trading and distributors provider Pervasive Commodities has announced a stock split in the ratio of 10:1. Accordingly, the subdivision of 1 equity share of face value ₹10 each, fully paid-up, into 10 equity shares of face value ₹1 each, fully paid-up, will take place. The company has set Monday, April 7, 2025, as the record date to ascertain shareholders’ eligibility for the said announcement. 

The ex-date refers to the date when a stock begins trading without the entitlement to dividends, spin-offs, or subdivisions (stock splits). This means that on or after this date, the dividend, subdivision (stock split), or spin-off is not available to new buyers of the stock. To qualify for these corporate actions, investors must own the stock before the ex-date. The beneficiaries of the announcements are determined by the company based on the list of investors recorded by the end of the record date.

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