Asian markets on Thursday got battered by the latest tariffs imposed by US President Donald Trump. Auto companies pulled the Indian equity benchmarks Sensex and Nifty down on market open, before recovering some lost ground. In morning trade, Nikkei (Japan) was 1 per cent down, KOSPI (South Korea) slipped at least 0.7 per cent, and Hang Seng (Hong Kong) dropped by 0.3 per cent.
Trump’s announcement to impose 25 per cent tariffs on all imported cars and parts led to auto indices across the world slumping, including the US. Major American car manufacturers Ford and GM saw their stock slump as the US markets closed on Wednesday, almost around the same time early Asian markets opened to red.
Around 50 per cent of the cars imported to the United States in 2024 were imported, according to industry experts.
Japanese automaker Toyota shares fell almost 3.5 per cent during the day, while Mazda and Subaru plunged beyond 6 per cent. In Seoul, Hyundai Motor Co shed more than 4 per cent while Kia slipped by 3.9%.
Chinese EV makers also saw their shares battered. However, the Hang Seng index in Hong Kong recovered after the initial slump.
Back in India, Tata Motors shares went on a free fall at the opening bell, shedding around 6 per cent of its share price. Tata exports Jaguar Land Rover vehicles to the US.
Opening in red, the 30-share benchmark Sensex quickly recovered after Hero Motor Co, L&T, Shriram Finance, Tata Consumer Products, Wipro, Trent and others posted steady gains.
The Sensex climbed more than 200 points to 77,491.33 while the Nifty gained at least 48 points to 23,535.50 in early trade despite a dismal opening.
Apart from Tata Motors, other stocks that lagged were Sun Pharma, Asian Paints, Mahindra & Mahindra, IndusInd Bank and Hindustan Unilever.
The positive sentiment was further bolstered by foreign institutional investors (FIIs) buying into the stock markets. On Wednesday, FIIs bought equities worth ₹2,240.55 crore.
"The market has turned cautious as the reciprocal tariff day approaches," said V.K. Vijayakumar of Geojit Financial Services, stating that current institutional market activity suggests that foreign investors are not as concerned about tariffs as domestic players.
The rupee, however, opened to a 24-paise fall, depreciating to 85.93 versus the US dollar in early Thursday trade, despite gaining some support at lower levels by foreign fund inflows.
Brent crude trading 0.12 per cent up did not help matters either.
