Supreme Court Overturns Trump Tariffs; Market Reaction May Be Briefly Euphoric
Indian Equities Open on a Positive Note Amid Tariff Uncertainty
February 23, 2024
Indian equities are expected to open on a positive note, up 1.25% at 25,886, as the US Supreme Court struck down President Donald Trump's tariff order under the International Emergency Economic Powers Act (IEEPA), effectively removing the 18% tariff imposed on Indian goods.
However, optimism remains cautious as Trump signed a fresh executive order under Section 122 of the 1974 Trade Act imposing a 15% tariff on all countries, effective February 24. Market experts believe that any positive momentum in Indian equities is likely to be short-lived due to continued uncertainty and frequent changes in tariff policy.
Market Volatility Rises Amid Tariff Confusion
Despite the expected strong opening, uncertainty over the final tariff structure continues to weigh on investor sentiment. The India VIX, the volatility index, rose to 14.36, its highest level since February 1, and remains well above key moving averages, signalling rising anxiety among investors.
Market Outlook and Key Levels
Ajit Mishra, Senior Vice-President of Research at Religare Broking, expects the 18% tariff to be reinstated, citing the likelihood that the final tariff rate will not be lower than the earlier negotiated level. Hariprasad K, Founder, Livelong Wealth, suggests that 25,500 emerges as the immediate pivot level, with sustaining above this level paving the way for a move towards 25,700.
Read also: Treasury Yields Experience Largest Increase in Two Weeks Following Release of Labor Market Data
Key Takeaways
- Indian equities open on a positive note, up 1.25% at 25,886
- Uncertainty over the final tariff structure continues to weigh on investor sentiment
- Market experts believe that any positive momentum is likely to be short-lived
- India VIX rises to 14.36, its highest level since February 1
- Key levels to watch: 25,500 and 25,350
Investor Takeaway
Investors should remain cautious due to ongoing uncertainty over tariff policy.
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