Trump on Trade Deal: The Indian stock market may react to US President Donald Trump’s comments on the India-US trade deal on Thursday. The market has been under pressure for the last few sessions and in such a situation, Trump’s statement is being considered very important in the eyes of investors.
During the ongoing World Economic Forum Summit in Davos, Moneycontrol’s Chandra Srikanth questioned Trump about the India-US trade deal. On this, Trump said, ‘First of all, I respect your Prime Minister very much. He is a great person and a good friend of mine. We will make a good deal with India.
Still heavy tariffs on Indian exports
However, Trump did not clarify when this deal would finally be signed. Several rounds of talks have already taken place between the two countries on this issue.
At present, a tariff of up to 50 percent is being imposed on exports from India to America. This is the reason why the uncertainty regarding the trade deal is continuously putting pressure on the market.
Export companies in focus
After Trump’s statement, attention has once again been focused on those companies whose business is largely dependent on exports. Especially textile, shrimp feed exporters and pharma sectors are in discussion.
At present there is no tariff on the pharma sector, but the textile sector has been affected the most. 50 to 70 percent of the earnings of companies like Gokaldas Exports, Welspun Living, Pearl Global come from the American market. In such a situation, the tariff has a direct impact on their profits.
Shrimp feed companies found an alternative way
America is also a big market for shrimp feed companies. Companies like Avanti Feeds, Apex Frozen Foods export a major share to America. However, these companies have turned to alternative markets like the European Union in time. This has softened the blow to some extent.
The actual impact of tariffs on all these sectors will be revealed in the Q3 results of the companies. These results have not been declared yet, so investors seem cautious.
Modi-Trump dialogue and new US ambassador
In recent times, talks have taken place between Prime Minister Modi and President Trump on many issues. The new US Ambassador to India, Sergio Gore, in his first address said that Trump has sent his best wishes to Prime Minister Modi and the people of India.
This definitely indicates that there is dialogue in the relationship, but the real relief to the market will come only when a concrete decision on the trade deal comes out.
Why is the Indian stock market falling?
There has been sharp selling in the Indian stock market in the last few trading sessions. There are many big reasons behind this, not just the trade deal.
Concerns remain regarding Japan’s bond market. Many important technical levels of Nifty have been broken. Foreign institutional investors are continuously selling. The rupee is also weakening. All these reasons together have put the market under pressure.
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