In retaliation to the U.S. announcing a proposed list of products imported from China that could be subject to additional tariffs of 25 per cent amounting to Dollars 50 billion, China on Wednesday too issued new tariffs (implementation date to be declared later) on $50 billion list of USA goods, ranging from soybeans to aircraft, media reports said.
The barometer 30-scrip Sensitive index (Sensex) of the BSE shed over 500 points from its day's high at 33,505.53 points to trade at 32,999.82 points (around 2.50 p.m.) - down 370.81 points or 1.11 per cent from its previous session's close. Asian markets ended mixed today while most European markets traded lower today.
According to a Reuters report, China will impose an additional tariff of 25 per cent on 106 USA goods. Analysts fear that an escalating trade war would hurt the global economic growth. The broader Topix index closed with similar gains. The selling was broad-based with the small- and mid-cap universe underperforming the large-caps. "Chinese tit-for-tat response to the U.S. tariff hike with a reciprocal tariff has triggered concerns that we may be in for a long drawn trade war". A trade war will definitely be the single-biggest trigger at the moment for global markets. "From India's standpoint, upcoming results and political developments have to be monitored", said Jagannadham Thunuguntla, head of research (wealth), Centrum Broking. There is consensus on the status quo being maintained on repo rates, but the markets will be interested in RBI commentary and its plan of action to address the rising bond yields.
Tata Steel, with a loss of over 3 per cent, remained the top loser in the Sensex pack.
The US Dow Jones Industrial Average ended 1.65 per cent higher in yesterday's trade.
The Sensex is trading at 33,415.31 points, down by 44.68 points or 0.13 per cent.
According to provisional data, domestic investors purchased shares worth Rs479.18 crore on net basis, while foreign investors sold shares worth Rs376.51 crore on Tuesday.