Indian shares fell on Monday, dented by losses across sectors, after the country slapped higher tariffs on certain US products in retaliation to Washington's decision to remove certain trade privileges for New Delhi.
India, the largest importer of US almonds, imposed higher retaliatory tariffs on 28 US products, including almonds, apples and walnuts from Sunday. Total trade between the two countries stood at about $142.1 billion in 2018.
Higher Indian tariffs on US goods could impact growing political and security ties between the two nations. "India putting retaliatory tariffs on US is leading to a fear that it might escalate into a trade war between the two countries," said Siddhartha Khemka, head of retail research at Motilal Oswal Securities.
"Our economy is anyway struggling in terms of growth and any additional pressure in terms of export because of this could further put pressure on the economy," he said. The broader Nifty fell 0.58% to 11,755.05 as of 0510 GMT, while the benchmark Sensex declined 0.52% to 39,247.55. Only nine stocks were trading in the green on the Nifty.
Nifty energy index fell 1.4%, with Reliance Industries among the biggest drags. Reliance shares touched their lowest level in over four weeks, falling up to 2%. Oil prices rose on Monday after US Secretary of State Mike Pompeo said Washington will take all actions necessary to guarantee safe navigation in the Middle East, as tensions mounted following attacks on tankers last week.
Nifty metal index fell 1.9%, dragged by JSW Steel Ltd and Tata Steel Ltd. JSW Steel fell up to 3.3%, while Tata Steel shed 2.5%. Among the losers, Jet Airways Ltd fell over 16%. Lenders to the grounded airline will finalise the course of action for the carrier on Monday, as per reports. Lenders will need to take a call on whether a rescue of the carrier is still possible or it will have to be taken to bankruptcy court.
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