Sensex, Nifty Likely To Open On Flat Note On Tariff Worries

(RTTNews) - Indian shares look set to open on a flat note Wednesday as investors react to U.S. President Donald Trump's latest tariff threats and await the Reserve Bank of India's policy announcement, with investors expecting a rate pause and dovish signals to offset rising external risks.

Trump on Tuesday threatened to raise tariffs on Indian goods "very substantially" within 24 hours, citing India's continued purchases of Russian oil.

ICRA, the Indian ratings agency, downgraded India's GDP growth projection for FY26 from 6.2 percent to 6.0 percent, citing U.S. tariff risks and trade uncertainty.

Benchmark indexes Sensex and Nifty fell around 0.4 percent and 0.30 percent, respectively on Tuesday amid escalating trade tensions with the United States.

The rupee plummeted to a record closing low of 87.8 against the dollar, extending losses for a third consecutive session.

Foreign Portfolio Investors (FPIs) offloaded shares worth Rs 22 crore on a net basis Tuesday, while domestic institutional investors (DIIs) net bought shares to the tune of Rs 3,840 crore, according to provisional NSE data.

Asian markets were mixed this morning after Trump hailed his "good relationship" with his Chinese counterpart Xi Jinping, adding that a deal with China was taking shape.

The dollar index edged lower and Treasuries steadied after dropping in the prior session, while gold ticked lower after four consecutive sessions of gains as investors look forward to Trump's decision on Federal Reserve appointments.

Oil prices edged up slightly after ending lower on Tuesday on rising OPEC+ supply and worries of weaker global demand.

U.S. stocks ended lower overnight as weaker-than-expected services activity data and new tariff comments from President Trump added to stagflation concerns.

Investors fretted about long-term trade consequences as Trump announced his intention to significantly increase tariffs on India and said that tariffs on semiconductor and chip imports would be announced as soon as next week to boost U.S. manufacturing.

Trump also told CNBC planned tariffs on pharmaceuticals imported into the U.S. could eventually reach as high as 250 percent.

The tech-heavy Nasdaq Composite shed 0.7 percent, the S&P 500 gave up half a percent and the Dow eased 0.1 percent.

European stocks rose slightly on Tuesday as strong corporate earnings and U.S. rate cut hopes offset tariff-related worries.

The pan European STOXX 600 edged up by 0.2 percent. The German DAX rose 0.4 percent and the U.K.'s FTSE 100 added 0.2 percent while France's CAC 40 slid 0.1 percent.