The Asia-Pacific markets began Tuesday’s session on a mostly positive note. Investors seemed to shrug off the latest tariff threat by US President Donald Trump. This time, it was directed towards India because of its purchase of Russian oil.
While regional indices such as Japan’s Nikkei or South Korea’s Kospi have advanced, Indian benchmarks including the Sensex are expecting a subdued, and possibly volatile, start.
Truth Social is President Trump’s platform on social media, and he has announced his plans to increase tariffs significantly on Indian exports into the United States.
Trump expressed his displeasure by writing: “India not only buys massive quantities of Russian Oil but they also sell it for a large profit on the Open Market, as well for most of that Oil.”
Trump took to Truth Social on Monday to threaten to raise the existing 25% tariff level, but he didn’t specify the new figure. Last week, Trump threatened a 25 percent tax plus an unknown penalty on India’s trade with Russia.
India refutes, and cites US/EU trade with Russia
India responded with a strong response that the US as well as the European Union are “targeting” it over its Russian oil imports.
In a late-Monday statement, India’s Foreign Ministry argued that it only started importing Russian oil after the traditional supply was diverted to Europe in the wake of the Russia/Ukraine War in 2022.
It then called out both the US and EU. The Ministry stated, “It is shocking that those nations who criticize India also trade with Russia.”
India cited data from the European Commission to highlight that in 2024 EU bilateral trade with Russia was estimated at 78.1 billion dollars, while its service trade stood at 17.2 billion euro in 2023.
India claimed that India’s total trading with Russia is “significantly greater” than the trade of the EU with Russia.
The day was positive for the majority of Asia
Most Asia-Pacific stock markets opened the day on a positive note, despite the threat of new tariffs. The benchmark Nikkei was up by 0.54% in Japan, and the Topix index gained 0.45%.
The Kospi, the South Korean stock exchange index rose by a staggering 1.77%. Meanwhile, Kosdaq’s small cap index increased by 1.83%. S&P/ASX 200 in Australia also rose, up by 0.84%. The MSCI Asia Pacific Index increased 0.4%.
Hong Kong and Mainland China stocks both rose, following the regional gains. Hong Kong’s Hang Seng Index and Mainland China’s CSI 300 both rose by 0.24%.
The US dollar was weakening, and a currency gauge fell by 0.1%.
Indian markets to start muted as tariffs and policies are watched
The Indian benchmark indices Nifty and Sensex are expected to have a quiet start on August 5, 2018.
Fresh tariff threats by President Trump will likely weigh on the sentiment and test the Nifty50 index’s recovery on Monday. The Nifty 50 had made a good start for the week following five weeks of sales.
As of 8am, GIFT Nifty quoted at 24,767. This is down 0.1 per cent, indicating a softer opening for the domestic equity market. The first week-end of Sensex contract for August is also today, and the RBI Monetary Policy Committee will meet on the second day. This could add to the potential volatility of the market.
The reactions to earnings will be another key factor. Pharma names such as Aurobindo, Sanofi and DLF, along with other stocks, like Delta Corp and DLF, are all expected to react. Today, the Nifty will be back with earnings from BhartiAirtel and Adani Ports amongst others.
The analysts note that on the Nifty’s upside, the zone between 24,750 and 24,800 is an important resistance.
Focus on oil and US markets
Oil prices on commodity markets stabilized following a drop of three days as investors assessed the risk to Russian supply. President Trump increased his threats to punish India for purchasing Moscow’s oil. US Treasuries remained unchanged.
A strong session in Wall Street Monday also contributed to the positive sentiment seen across Asia. Investors weighed up robust corporate earnings against growing expectations of a Federal Reserve interest rate cut following weaker than expected jobs data.
This article Asian markets: Nikkei rises 0.54%, Sensex opens muted after Trump threats new tariffs first appeared on The ICD
