Holistic Analysis of Liquidity for ‘Nifty 50' due to Reciprocal Tariff Imposition

Dr. Alka Awasthi; Anshu Kumar Sinha

doi:10.36948/ijfmr.2025.v07i03.46572

Holistic Analysis of Liquidity for ‘Nifty 50' due to Reciprocal Tariff Imposition

Author(s)	Dr. Alka Awasthi, Anshu Kumar Sinha
Country	India
Abstract	Trade is carried out in a capital market by putting in one's money. Information needed to carry out the buying and selling of the financial instruments like stocks, bonds, currencies etc. in a capital market is provided by the market itself. The capital market is being run as the financial transactions take place between the suppliers of funds and the users of funds i.e. buyers and sellers of financial instruments. The capital market is composed of purchase and sell for stocks, bonds and currency. In a Capital markets the financial transactions can occur at a higher or comparatively lower prices. As the average prices of transactions for company's stocks in a stock market goes down, the liquidity is expected to get exhausted from the market, resulting in the decline of different stock markets indices. The other various reasons which lead to lowering down of stock market indices include high interest rates, trade deficit, declining '$', inflation concerns. Hence, recently as the United States increased the tariffs on the different country’s imported goods to boost the consumption of native products and also to reduce its trade deficit, may lead to a restructure of the global supply chain for the different industries as they feel the impact. As the different stock markets across the globe sense the changes in global business alignment, it creates skepticism in the minds of investors whether to change their existing portfolios or to sustain with them. As the reciprocal tariff plan gets imposed on India as well (final decisions by 9th July 2025); we study the liquidity status of Nifty 50 as over $9 trillion gets wiped from the global market in 48 hours. We rely on liquidity model for our study. We have developed our research methods based on the research gap identified via 'Exploratory Research' by going through different 'Research Papers', 'Articles', 'Native & Global News' published online mostly. Additionally, we have relied on 'Secondary Data' published online from different financial websites, news channels etc. The research study concludes that as the new tariff gets imposed on other countries across the globe, Nifty 50 feels the splash but yet stable.
Published In	Volume 7, Issue 3, May-June 2025
Published On	2025-06-05
DOI	https://doi.org/10.36948/ijfmr.2025.v07i03.46572
Short DOI	https://doi.org/g9pzsp

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Holistic Analysis of Liquidity for ‘Nifty 50' due to Reciprocal Tariff Imposition

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