Key Points

Japan's Nikkei 225 index dropped 2.69 per cent, while Hong Kong's Hang Seng index fell by 1.80 per cent. South Korea's KOSPI index also declined by 1.3 per cent.

The negative sentiment was not limited to Asia, as the futures of US stock markets also showed signs of distress. Dow Jones Futures were down by 1.78 percent, indicating that American markets had also reacted unfavorably to the tariff announcement.

Indian stock market futures were also under pressure. Gift Nifty futures declined by 1.11 percent before the opening of the market on Thursday, suggesting that Indian markets might open lower in response to the global downturn.

Banking and market expert Ajay Bagga told ANI that the uncertainty in the markets has now turned into a certainty of economic and financial strain. "Uncertainty is now converted to certainty of economic and market pain. The first reaction is to rush into safe havens and to sell risk assets. The impact on India will come via the US dollar, by economic pain due to possible falling exports and margins, and by impacted EM portfolio flows as investors flee to safe havens like gold, yen, Swiss franc, and Japanese government bonds," he said.

Bagga also warned that if currency wars begin, with China depreciating its currency to offset the tariffs, stock markets could witness further outflows and declines.

The offshore China Internet ETF has already fallen by 6 per cent, while the Vietnam Offshore Country ETF has seen a sharper decline of 10 per cent this morning.

US President Donald Trump announced new import tariffs on Wednesday (local time), outlining the rates to be imposed on countries around the world, with India facing a 26 percent tariff.

Market participants are now closely watching global developments as further escalations in trade tensions could lead to additional volatility in the financial markets.

- ANI