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What is the story about?
Indian equity markets may react on Thursday to US President Donald Trump's remark on the India-US trade deal.
On the sidelines of the World Economic Forum summit in Davos, Trump was asked by Moneycontrol's Chandra Srikanth about the deal, to which he replied "First of all I have great respect for your Prime Minister. He's a great man and a great friend of mine and we're going to have a good deal."
However, Trump did not specify a timeline as to when will the deal, which has undergone multiple rounds of negotiations between the two countries, will eventually be signed.
Indian exports currently have a 50% tariff rate from the US.
India's stock markets have sold off sharply over the last few trading sessions owing to multiple reasons, the uncertainties surrounding the trade deal with the US being one of them. Geopolitical tensions, concerns surrounding Japan's bond market, breaking of key technical levels, and relentless selling pressure from foreign institutions, along with a depreciating currency, are some of the other factors behind the fall seen in Indian equities.
Trump's comments once again puts the spotlight on export-oriented companies, such as Textiles, Shrimp feed exporters, Pharma, among others. While Pharma currently does not attract any tariff as a sector, Textile has been the most impacted, as companies like Gokaldas Exports, Welspun Living, Pearl Global, and others, get anywhere between 50% to 70% of their revenues from the US market.
While the US is also a major market for the shrimp feed companies like Avanti Feeds, Apex Frozen Foods and others, they have managed to find alternative markets, particularly in the European Union, for exporting their products.
The actual impact of the tariffs on these sectors will be seen in their Q3 results, which are yet to be disclosed.
Both Prime Minister Modi and President Trump have had conversations over various issues in the recent times. The new US Ambassador to India, Sergio Gor, in his inaugural address, spoke about the greetings Trump sent to PM Modi and to the people of India.
On the sidelines of the World Economic Forum summit in Davos, Trump was asked by Moneycontrol's Chandra Srikanth about the deal, to which he replied "First of all I have great respect for your Prime Minister. He's a great man and a great friend of mine and we're going to have a good deal."
However, Trump did not specify a timeline as to when will the deal, which has undergone multiple rounds of negotiations between the two countries, will eventually be signed.
Indian exports currently have a 50% tariff rate from the US.
India's stock markets have sold off sharply over the last few trading sessions owing to multiple reasons, the uncertainties surrounding the trade deal with the US being one of them. Geopolitical tensions, concerns surrounding Japan's bond market, breaking of key technical levels, and relentless selling pressure from foreign institutions, along with a depreciating currency, are some of the other factors behind the fall seen in Indian equities.
Trump's comments once again puts the spotlight on export-oriented companies, such as Textiles, Shrimp feed exporters, Pharma, among others. While Pharma currently does not attract any tariff as a sector, Textile has been the most impacted, as companies like Gokaldas Exports, Welspun Living, Pearl Global, and others, get anywhere between 50% to 70% of their revenues from the US market.
While the US is also a major market for the shrimp feed companies like Avanti Feeds, Apex Frozen Foods and others, they have managed to find alternative markets, particularly in the European Union, for exporting their products.
The actual impact of the tariffs on these sectors will be seen in their Q3 results, which are yet to be disclosed.
Both Prime Minister Modi and President Trump have had conversations over various issues in the recent times. The new US Ambassador to India, Sergio Gor, in his inaugural address, spoke about the greetings Trump sent to PM Modi and to the people of India.
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