Indian benchmarks likely to be muted as world stocks jitter ahead of Trump tariffs

India’s benchmark indexes are set for a muted open on Tuesday, while other Asian markets slumped after U.S. President Donald Trump said his proposed tariffs would go into effect as planned.

The GIFT Nifty futures were trading at 22,093.5 as of 07:57 a.m. IST, indicating that the blue-chip Nifty 50 will open near Monday’s close of 22,119.30.

Trump’s proposed 25% tariffs on Canada, Mexico will go into effect from 10:31 a.m. IST on Tuesday.

An additional 10% duty on China, resulting in a cumulative 20% tariff, will also enter into force along with these levies.

Trump also said reciprocal tariffs will start on April 2, escalating trade tensions and dragging financial markets.

Higher tariffs, besides their potential adverse impact on global growth, could spur inflation in the U.S., leading to higher interest rates for longer and hurting foreign flows into emerging markets such as India.

“We expect the market to remain flat to negative on account of concerns over continued foreign selling, imposition of tariffs by the U.S. on Canada, Mexico and lack of domestic triggers,” said Siddhartha Khemka, head of research of wealth management at Motilal Oswal Financial Services.

The MSCI Asia ex-Japan dropped about 1%, tracking an overnight decline in Wall Street equities.

Indian shares end flat as US tariff worries offset domestic growth optimism

The Nifty and BSE Sensex are down about 16% from record highs hit in September amid growth concerns, slowing corporate earnings, relentless foreign selling and trade uncertainty.

Foreign portfolio investors (FPIs) have sold over $26 billion worth of shares in India since October, including 47.88 billion rupees ($548.29 million) on Monday.

The broader small and midcaps confirmed bear market in February, a more than 20% fall from their record high levels.