US Tariffs on Colombia Trigger Global Market Jitters

Indian stock markets faced a sharp downturn on Monday after US President Trump imposed a tariff on Colombian imports, affecting global market sentiment. The Nifty 50 and BSE Sensex both opened significantly lower. Experts warn of further volatility as global repercussions of U.S. trade policies unfold.

Indian stock markets opened with significant declines on Monday, prompted by US President Donald Trump's decision to levy a 25% tariff on Colombian imports. This announcement soured investor sentiment, with the Nifty 50 index dropping by 152.05 points or 0.66%, and the BSE Sensex losing 490.03 points or 0.64% at opening bell.

The tariffs come amid escalating tensions between the US and Colombia, after Colombia refused to let US planes deporting Colombian immigrants land in the country. Colombia responded by deploying its presidential plane for immigrant transport from Honduras. Despite these logistical maneuvers, market sentiment remains adversely affected.

Global finance experts have indicated that the US's use of tariffs as a strategic tool is causing widespread concern. While US-Colombia trade volume is relatively modest, the ripple effects on US relations with other trading partners like Mexico, Canada, Europe, and China have been unsettling. Ajay Bagga, an expert on banking and markets, mentioned that a resolution to the Colombian tariff dispute could boost market sentiment, but as the deadline approaches for tariffs on Mexico and Canada, uncertainty looms. With emerging markets already under pressure from 'MAGAnomics', hopes for a pre-Union Budget rally in India are dwindling.

Sector indices mirrored the overall grim outlook, with notable declines in Nifty Media, Metal, and Consumer Durables. Nifty IT also slumped by 0.92%. While only four out of 50 Nifty stocks showed positive trends, others traded in the red. Major Indian firms like Coal India, Tata Steel, and Bajaj Housing Finance are scheduled to report their Q3 earnings today, adding to investor concerns.

Market analysts predict that the Nifty may face further fluctuations, especially if the crucial 23,000 support level is breached, potentially leading to a drop towards 22,670, a significant Fibonacci retracement level. Nevertheless, the upcoming budget announcement might drive Nifty's direction. In Asia, Japan's Nikkei 225 and Singapore's Straits Times indices fell slightly, while Hong Kong's Hang Seng saw a small gain. Meanwhile, markets in Taiwan and South Korea stayed closed.

(With inputs from agencies.)