A global tariff war that was started by the US on Saturday night, is spreading panic among markets around the world on Monday with several of the leading indices deep in the red. The Indian market, however, on Monday held on to its ground despite continuous selling by foreign funds. On Monday, among the major Asian indices, the Nikkei in Japan closed 2.6% lower while Hang Seng and Shanghai both closed flat. On Dalal Street, the sensex closed 319 points or 0.4% lower at 77,187 points.
In Europe, in mid-session, Dax in Germany was down 1.3% while FTSE in the UK was down 1.1%. Across the Atlantic, the Dow Jones was down 0.3% lower after falling over 1.4% in early trades. After a sharply lower open, as US President Donald Trump indicated that US and Mexico were negotiating about tariffs, the markets recovered from their early lows.
According to Vinod Nair of Geojit Financial Services, the global market got unsettled amid the onset of the ‘trade war’, as tariff conflicts between the US and other nations are unlikely to yield any economic benefits. “Instead, it may cause challenges to the global economy, heightening global financial risks. International trade, which had flourished under the framework of globalisation, now faces threats from the new protectionist policies. Front and contour tariffs are expected to make the world less efficient and elevate global inflation & interest rates.”
