US tariff: Larger the US business, bigger the stock hit

MUMBAI: Stocks of companies with large exposure to the US market are being sold aggressively by investors as market players fears about a recession in the world's largest economy and slowdown in businesses globally grows. Economists and market strategists believe that the high import tariffs by the US could prompt other countries to retaliate with similar measures, which in turn could lead to a global slowdown in production, hurting almost every country.

In the Indian market, companies from sectors like auto & auto parts, metals, software, pharma, textiles, and gems & jewellery have seen their stock prices slid sharply.


Among leading conglomerates, Tata Group, with a large exposure to the US market, has seen its aggregate market capitalisation dip the most since the new tariff proposals were announced late on April 2. The group's market cap is down by about Rs 2.4 lakh crore to Rs 25.5 lakh crore. This is followed by Mukesh Ambani-led Reliance Industries group, which has lost about Rs 1.3 lakh crore worth of market value.

Among Tata Group companies, flagship TCS's market cap has fallen by about Rs 97,100 crore; Tata Motors, which has a large exposure to the US market through its international arm JLR, has lost about Rs 33,800 crore worth of market value. The current selloff in IT exporters is mainly on the back of fears that a slowdown in the US, which is the biggest market for software exports , could hit their income and profit. The biggest market cap loss among companies has been in Reliance Industries (Rs 1.1 lakh crore).

Among metals companies, Tata Steel has lost nearly Rs 31,300 crore worth of market cap while Hindalco has lost about Rs 22,200 crore worth of market value. Metal stocks are down on fears that a global recession or a slowdown would substantially curtail demand for metals, sector analysts said. In Monday's market, six of the 30 sensex constituents hit 52-week low levels: Infosys, L&T, RIL, Tata Motors, TCS and Titan. And among BSE 100 constituents, as many as 22 stocks hit 52-week low levels.