Sensex, Nifty: Rs 2 lakh crore gone within 10 secs! Trump tariffs make investors poorer

Sensex, Nifty: A 27 per cent reciprocal tariff imposed by the US administration overnight made India stock investors poorer by Rs 1.93 lakh crore within 10 seconds of trade on Thursday. Investor wealth, as suggested by the BSE market capitalisation, dropped Rs 1,93,170 crore to Rs 4,11,04,925 crore within 10 seconds against Wednesday's Rs 4,12,98,095 crore.

India, nonetheless, outperformed Asian peers, as the series of new tariffs, collectively referred to as "Liberation Day" tariffs, exempted pharma stocks. They also excluded any incremental tariffs on steel and aluminium; and auto and auto component imports.

The BSE Sensex stood at 76,084.09, down 538.90 points, or 0.72 per cent. Nifty was trading at 23,192.40, down 139.95 points or 0.60 per cent. 

"Despite the near term hit, we believe this is likely to be the start of long drawn negotiations and see scope for some immediate easing of tariffs imposed. A potential India-US trade deal may eventually iron out some of the issues around tariffs and market access on both sides with India also committing to higher purchases of US crude oil and defence," Nirmal Bang said.

In Asia, Japan's Nikkei dived nearly 4 per cent while Hong Kong's Hang Seng slipped 1.64 per cent. Markets in Korea and Australia fell up to 2 per cent. Dow Jones futures, in fact, were trading at 41,625, down 867 points or 2.02 per cent, as fears of inflation and its negative impact on the US intensified.       

The US President imposed 34 per cent tariff on China and up to 46 per cent on Japan, the UK, Vietnam, South Korea and Taiwan. The US claimed it maintained one of the world’s lowest simple average most-favored-nation (MFN) tariff rates at 3.3 per cent, compared to much higher rates among key trading partners such as Brazil (11.2 per cent), China (7.5 per cent), the European Union (5 per cent), India (17 per cent), and Vietnam (9.4 per cent).

Arsh Mogre of PL Capital Institutional Equities said: “The US imposition of a 26 per cent uniform tariff on Indian exports marks a significant yet strategic recalibration of trade dynamics towards bilateralism and the end of multilateralism—less an act of protectionism, more a high-stakes gambit in trade negotiations."

Ankur Sharma, Market Analyst, VT Markets noted that top US automakers fell sharply in after-hours trading, with General Motors down more than 7 per cent, Ford off 4.6 per cent and Stellantis 4 per cent. Japan automakers also plunged with Nissan, Toyota and Honda falling 2-3 per cent while Hyundai Motor and Kia in South Korea slipping about 4 per cent each.

"We can even expect a high impact on the Pharma industry. While specific tariff percentages have not been detailed, the US is a significant market for Indian pharmaceutical exports. Increased Tariffs potentially lead to a decline in export revenues. Another sector which will be highly impacted by this is IT. The US has indicated potential tariffs on IT services, a sector where India has substantial exports," Sharma said.

MOFSL stated that the Nifty is currently trading at 20 times its FY26 earnings, close to its long-term average of 20.6 times, offering limited near-term upside.

"We believe that any upside from this point will depend on the stability of both global and local macroeconomic conditions, along with consistent earnings performance relative to expectations. Given the current macro and microeconomic environment, FY26 corporate earnings projections remain somewhat optimistic and could be subject to further downgrades," it said.