After opening the day on a negative note, Indian share markets have extended their losses and are presently trading in the red. Sectoral indices are trading on a negative note with stocks in the capital goods sector and metal sector witnessing maximum selling pressure.
The BSE Sensex is trading down 202 points (down 0.6%) and the NSE Nifty is trading down 70 points (down 0.7%). The BSE Mid Cap index is trading down by 1.2%, while the BSE Small Cap index is trading down by 1.8%. The rupee is trading at 64.97 to the US dollar.
As per a leading financial daily, US President Donald Trump today said that the US, which has US$ 800 billion deficit with other countries, is ready for a trade war with them if they retaliated against his decision to impose an import tariff on steel and aluminum.
The comments follow Donald Trump’s plan to impose across-the-board tariffs on steel and aluminum imports to which the European Union (EU) proposed to apply a retaliatory tariff of 25% on a range of goods imported from the US.
Trump proposes to slap a 25% tariff on imports of steel and a 10% tariff on imports of aluminum. The formal announcement is expected to be made this week.
As for domestic markets, the above announcement by Trump also sent Indian metal stocks in the red, with SAIL share price, NMDC share price, JSW Steel share price, and Tata Steel share price witnessing most of the selling pressure.
Note that India’s steel industry was just coming out of a rough patch. Demand was picking up. Steel prices were on the rise. Buyers were lining up to pick up stressed assets. With the expected pick up in the investment cycle, the sector was on the upswing. And steel exports were on a roll, as can be seen from the chart below:
Is the Steel Sector’s Recovery Under Threat?
However, Donald Trump has now spoiled the party with his plans to impose the above tariffs. India produces a lot of both commodities but internationally, we are not a big player. The US imports only 2.4% of steel and 2% aluminium from India.