Source : INDIA TODAY NEWS
Even as US markets reeled from escalating tensions between President Donald Trump and Federal Reserve Chair Jerome Powell, the main indices on Dalal Street remained largely insulated. On Monday, the Dow Jones plunged over 1,000 points, the dollar hit a three-year low, and gold soared to fresh highs.
Yet, domestic benchmarks held steady despite a volatile open. The Sensex was up over 200 points, and the Nifty50 was holding its position above 24,100 at around 10 am.
Analysts attribute this calm to a growing trend: emerging markets like India are consciously attempting to decouple from the so-called “mother market.” The reason? Trump’s unpredictable policy shifts—ranging from tariff tantrums to fresh broadsides at the Fed—have made US asset classes riskier. And for many global investors, India is starting to look like a safer bet in uncertain times.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “The US market was rattled by the perception that Trump’s pressure on Powell could threaten the Fed’s independence. Markets abhor political meddling in monetary policy.” He added that these “abnormal times” are leading to “abnormal correlations”—and that India could continue to decouple.
Adding perspective, Kranthi Bathini, Director, Equity Strategist at WealthMills Securities, pointed out: “The US holds prominence because of its size and market capitalisation. We can’t completely ignore it. US markets influence global sentiment, especially in the short to medium term. There may be days of divergence, like now, but overall, US equity trends tend to sway others.”
Trump repeated his call for a rate cut on Monday, warning that the US economy could slow without immediate monetary easing. His criticism sparked fears of political interference in Fed decision-making, further unsettling Wall Street.
The impact was swift. The dollar index fell to 97.92, a level not seen since March 2022. The euro briefly crossed $1.15, and the Swiss franc surged to a decade high against the dollar. Meanwhile, gold—seen as a hedge against turmoil—jumped 2.6% to $3,414.91 an ounce, after hitting a record of $3,424.25.
Investors also rushed to safe-haven assets like Bitcoin and US Treasuries. Bitcoin climbed to $88,384, while the yield on the 10-year US note rose slightly to 4.346%.
Asian equities, however, were less reactive. In India, sentiment was buoyed by strong domestic fundamentals and expectations that banking stocks, particularly Bank Nifty, would remain resilient.
“This period of uncertainty may well witness EMs like India decoupling from the US market,” Vijayakumar said. “Investors should focus on fundamentally sound stocks.”
The turbulence came amid renewed trade tensions. China accused the US of abusing tariffs and warned nations against siding with Washington in broader economic agreements. Oil prices also dipped, with Brent down 2.71% at $66.12 per barrel, amid lingering uncertainty over demand.
While Wall Street braces for more volatility—fuelled by earnings from Alphabet and continued White House noise—Dalal Street seems content staying focused on its own script.
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SOURCE :- TIMES OF INDIA
