Geopolitical tensions disrupt India's 2026 stock market rally
India's stock market kicked off 2026 with a record high, but quickly lost steam as worries over new US tariffs on Russian oil imports rattled investors.
Export-focused Indian companies, particularly those with significant exposure to US markets, are feeling the heat.
Why does this matter?
A 25% tariff is already in place for India, and talk of even steeper US penalties—up to 500%—has made things unpredictable for export-driven sectors.
While domestic fundamentals remain strong, global demand-linked stocks are under pressure.
On the flip side, rising global defense spending is giving a boost to Indian defense stocks.
What's behind all this?
Tensions escalated after former US President Trump approved stricter trade rules targeting Russian energy.
Ongoing crises in Venezuela and Iran have added more uncertainty to oil markets, though oversupply is keeping things stable for now.
As the US shifts from sanctions to direct action, investors are playing it safe with precious metals and staying cautious on Indian equities.