What is the Indian stock market?
Like any other market, the stock market is a platform which enables buyers and sellers to interact and negotiate the frequent buying and selling of publicly held companies. While stock markets in the past practiced buying and selling of shares, and bonds via physical paper certificates , nowadays they operate entirely through computers and the internet. India has two stock exchange bases- BSE and NSE.
The NSE is the biggest stock exchange in India while the BSE is the oldest stock exchange not just in India but in Asia. Hence, people across the world look up to these indices and the investors and traders look out for share market tips and stock tips to make profits from these movements.
What is the U.S. trade war?
The U.S. – China trade war is an on-going dispute between the world’s two biggest economies. China and the U.S. have been in trade clashes pretty frequently but this is the first tug that has not been resolved since its origin in March last year when Trump imposed heavy taxes on the imports of steel and aluminum from China, in answer to which, China also increased taxes for billions of dollars worth of American imports.
America raised taxes to a whopping 25% on almost $200 billions worth of imports on China, drastically affecting the global economy with a single decision. Higher tariffs lead to increased prices of goods which lead to less willingness of foreign buyers to purchase, adversely affecting the Chinese economic growth and financing conditions. The industries most affected by this are electronic and textile in China.
With the U.S. banning Huawei from operating in the states, China also comes up with its own list of ‘unreliable entities’ that are U.S. enterprises and organizations that do not follow trade rules, violate contract agreements and block or cut-off supply for unjustified reasons.
How is India impacted by the trade war
While the Chinese goods face restrictions and financial crisis to get imported into the states, which may not be beneficial for emerging companies and organizations, India might actually benefit from this. As mentioned by the U.N. in a report, this drastic time can surprisingly have a silver lining for countries like India because the exports from China are now on a halt so to compensate them people will switch to Indian goods which are bound to boost India’s exports rigorously.
According to Indian trade experts, India will now be tending to the needs of both the countries and tap unexpectedly high yields of exports due to this trade war. Textile, electronics, agriculture, automobile, machinery, and other industries are expected to benefit highly and score great export opportunities. Because the States has targetted intermediary industries from China such as electronic and machinery whereas China has targetted to cut off automobiles and agricultural imports from the States, all of which India can supply to both the nations hassle free.
This is a great opportunity that India can really work on and take advantage of because it is the only nation to match the scale of operations and supply chain of China. The stocks of the related companies and indices on a whole can have a positive trend.
The traders and investors can use effective share market tips and stock tips from Shyam Advisory to make maximum profit from these movements.
Technically, if India gets a boost in export, the inflation and depreciation of currency can be reverted and rupee can start rising in value in front of the dollar as demand for dollar in China will fall against the demand for rupee resulting in the increased value of rupees per dollar and decreased inflation.
While this prolonged dispute can be a huge threat to the world economy and emerging companies, India stands a chance to take advantage and woo potential investors in stocks and exports with the proper execution of strategies before they all get caught up in other third world countries.