Valuation, US tariff concerns weigh on mkt
NEW DELHI: Domestic stock market continues to reel under pressure despite a repo rate cut by the Reserve Bank of India (RBI) for the first time in 5 years and optimism surrounding the Union Budget. Further, a win by PM Narendra Modi’s BJP in the Delhi state elections failed to lift sentiments.
Market experts feel concerns related to a possible tariff hike by the US has overshadowed the positivities.
The street has also turned its focus on the valuation of the Indian market after valuation expert Aswath Damodaran in his latest blog wrote that the Indian stock market is the most expensive globally, even more than the US and China, and that no amount of optimism about India’s growth story can justify its steep valuations.
Falling for the fourth straight session, the local benchmark indices – BSE Sensex and NSE Nifty – shed about 0.70% each on Monday.
At close, the Sensex was down 548.39 points at 77,311.80, and the Nifty was down 178.35 points at 23,381.60. So far in 2025, the two indices are down about 1.5% each and from their 52-week high level, they are down 10-11% each.
A bigger pain is being felt in the smallcap and midcap segments. On Monday, Nifty Midcap and Smallcap indices shed more than 2% each and so far in 2025 they are down 8% and 11%, respectively. “The US tariff threats continued to impact the market sentiment.
Domestic yield is inching higher as investors stay cautious on riskier assets and navigate their investments to safe-haven assets like gold,” said Vinod Nair, Head of Research, Geojit Financial Services.
Latest reports surfaced highlighting that Trump may go for a 25% levy on steel and aluminium imports. The fresh tariff worry comes at a time when corporate earnings growth has slowed in recent quarters due to a weak demand environment, margin pressure, and a cautious near-term outlook.
