Another trade war
On Friday, Trump started a trade war with India after months of deliberations. The Trump administration removed India’s developing nation status under the general system of preferences, which allowed India to export a couple of thousand products to the US without any duty. In 2017, $5.7 billion worth of Indian goods imported in the US came duty free. However, that’s just over 10% of total goods exports from India. India called the update “unfortunate.”
Indian indexes fly high
Even though Friday’s GDP data showed that India’s economy grew at the slowest pace in years in the first quarter of 2019, the markets were optimistic today. Why? The dismal GDP growth numbers ignited the sentiment of a possible rate cut during the ongoing monetary policy meeting.
The S&P BSE Sensex gained 1.39% to end at 40,267.62, the highest ever closing. The NIFTY 50, which tracks 50 large-cap companies, also gained 1.39% and ended at 12,088.55, its all-time high. Both the indexes maintained upward momentum throughout the day.
The WisdomTree India Earnings ETF (EPI) gained 0.46% on Friday even though the key Indian indexes ended in the red on that day. In May, the ETF gained 1.2%. The iShares MSCI India ETF (INDA) gained 0.76% on Friday and 1.32% in May. The iShares India 50 ETF (INDY) gained 0.72 and 2.4% on Friday and in May, respectively. Only INDY outperformed key Indian indexes in May. In May, the Sensex gained 1.75%, while the Nifty50 gained 1.49%.