Indian Stock Market Opens Steady Amid Global Trade Concerns

On May 20, 2025, India's stock market indices, Sensex and Nifty50, opened with slight gains amid global trade concerns. The market sentiment reflects caution due to ongoing tariff disputes affecting the US economy. Sectoral indices showed positive movement, particularly in real estate and IT. Experts highlight the impact of US fiscal policies and trade tensions on global markets, urging Indian investors to remain optimistic about a potential soft landing in the US economy. This article delves into the latest market trends and expert insights.

By Narendra Chaudhary May 20, 2025, 10:55 IST

Market Overview

On Tuesday, May 20, 2025, India's primary stock indices, the Sensex and Nifty50, began trading with minimal fluctuations. The Sensex, which tracks 30 companies, increased by 47.73 points, starting at 82,107.15. Similarly, the Nifty50, representing the top 50 firms, rose by 50.75 points to reach 24,996.20.

The Indian markets mirrored trends from the US, which also closed flat due to ongoing worries about tariff disputes. Global investor sentiment remained cautious as trade tensions and fiscal challenges in the US influenced market dynamics.

Sector Performance

All sectoral indices on the National Stock Exchange opened positively. The Nifty Realty index led the way with a 1.43% increase, followed by Nifty IT, which rose by 0.65%. Other sectors also saw gains, with FMCG up by 0.4%, pharma by 0.36%, PSU Bank shares climbing 0.72%, and Nifty Auto advancing by 0.24%. The Bank Nifty recorded a modest rise of 0.4%, while the Nifty Next 50 index increased by 0.42%.

Global Market Influences

Market analysts pointed out that the US markets are under pressure, primarily due to the ongoing effects of tariff policies established during President Trump's tenure. The imposition of a minimum 10% duty on nearly all imports into the US has raised significant concerns regarding the future of global trade, impacting financial markets worldwide, including India. Additionally, the White House and US Treasury expressed strong opposition to Moody's recent downgrade of the US's 'AAA' credit rating.

Despite these challenges, US stock futures remained weak during Asian and European trading sessions but managed to recover, closing in the green for the sixth consecutive day.

Yields on US 30-year Treasury bonds briefly exceeded 5% but ultimately closed below that threshold. The US dollar also weakened, a trend some experts anticipated given the current economic climate.

Concerns for the US Economy

Experts have raised alarms about the widening fiscal deficit in the US, which continues to expand amid tax cuts implemented by the Trump administration. Analysts note that this deficit is being financed by what is often termed the 'exorbitant privilege' of the US dollar as the preferred global reserve currency.

Asian Market Performance

In Asian markets, major indices opened with gains on Tuesday. Hong Kong's Hang Seng index surged over 1%, Japan's Nikkei 225 increased by 0.4%, and South Korea's KOSPI rose by 0.26%.

Expert Insights

Banking and market expert Ajay Bagga commented, "Emerging Markets (EMs) will not be insulated from a slowdown in the US, although there is a gradual shift from US assets to Europe, Japan, and EMs. Indian investors must hope for a soft landing or no landing in the US, maintaining the theme of US exceptionalism despite the challenges posed by tariffs and the consequences of living beyond their means."