Government policies can significantly impact stock prices by influencing investor sentiment, company profits, and overall economic conditions; for example, tax cuts can boost stock prices by increasing disposable income and corporate profits, while policies that raise taxes on specific industries can lead to sell-offs in those sectors, causing stock prices to drop. It is not only about an economy of the country but even the world affairs may prove costly. This is what we get to see at Indian market where the stock market bad fell more than 800 points.
(my trading app acreenshot)
Ever since Donald Trump came into power, we have witness some worst blood bath in the Indian stock exchanges. Today is not different and the stock market is down due to tensions between the US and Colombia. Here’s what’s happening:
- US Tariffs on Colombia:
Yesterday, President Trump imposed a 25% tariff on Colombian imports like coffee and oil, warning it could rise to 50%. This disrupts trade and impacts businesses.
- Colombia Hits Back:
Colombia responded with a 25% tax on US goods, creating fears of higher costs and strained trade relations.
- Global Worries:
Investors worry this trade conflict could spread, shaking confidence in emerging markets.
- Flight Restrictions:
Tensions rose further as Colombia banned US military planes and limited deportation flights, adding to the uncertainty.
This situation teaches us how the political issues can have a direct impact on markets. Even I have incurred gheavy losses in my portfolio. It fell down more than 2% in todays trading session so far. The recovery is always tough. Let’s watch how things develop. Hope to see some Greener turnaround in coming days. But now it is not good to look at own portfolio. It is a good time to make some purchases but invest wisely.
In good faith - Peace!
