Global markets face fresh uncertainty as US President Donald Trump announced immediate tariffs on countries conducting business with Iran, while Indian market veterans identify emerging opportunities in the auto sector and anticipate the National Stock Exchange IPO.

Trump Imposes Iran Business Tariffs

Trump announced on his Truth Social platform that any country doing business with Iran will face a 25% tariff. The tariff applies to "any and all business being done with the United States of America and is effective immediately," according to his social media post. This development adds fresh complexity to global trade relationships and geopolitical tensions.

The announcement coincides with escalating violence in Iran, where the UN human rights office reports hundreds have been killed in protests as security forces intensify their crackdown on peaceful demonstrators.

Auto Sector Positioned for 2026 Growth

Veteran investor Raamdeo Agrawal made a significant market prediction, identifying the auto sector as the standout performer for 2026. Speaking at the CNBC-TV18 Market Forum, Agrawal stated, "I think auto will be the star of the year...I think you should buy auto ETF." This recommendation highlights potential opportunities in India's automotive industry as it approaches the new year.

NSE IPO Draws Long-term Investment Interest

The much-anticipated National Stock Exchange of India IPO continues attracting investor attention. Gurmeet Chadha, Managing Partner and CIO at Complete Circle, emphasized viewing the exchange as a long-term investment opportunity rather than a short-term trading play. According to Chadha, the NSE "may not be a 10x story from here, but a steady compounder," suggesting investors should focus on sustained growth potential rather than listing-day gains.

Policy and Corporate Developments

Several significant policy and corporate developments emerged across various sectors:

Global central banks have also expressed solidarity with the US Federal Reserve and Chair Jerome Powell, emphasizing that central bank independence remains essential for economic and financial stability.

Market Outlook

These developments reflect the interconnected nature of global markets, policy decisions, and corporate strategies. From international trade tensions to domestic sector opportunities, investors are navigating a complex landscape of challenges and potential growth areas. The combination of geopolitical uncertainty and identified sectoral opportunities suggests a mixed but dynamic market environment ahead.

US President Donald Trump's announcement of a 25% tariff on countries conducting business with Iran has added fresh pressure to Indian financial markets, which are already navigating existing trade tensions with the United States. The tariff threat comes as Indian benchmark indices experienced notable declines, reflecting investor concerns about potential trade disruptions.

Market Response to Tariff Announcement

Indian equity markets showed immediate reaction to Trump's tariff announcement, with both major indices posting significant declines during Tuesday's trading session.

Trump announced the tariff measure via Truth Social, stating that any country engaging in business with Iran would face a 25% tariff on trade with the United States. The announcement was described as "final and conclusive," though no official White House documentation has been released regarding the implementation details.

India-Iran Trade Dynamics

India's commercial relationship with Iran, while modest in scale, encompasses several key sectors that could be affected by the new tariff structure.

The Chabahar Port project represents a particular strategic concern, as it serves as India's gateway to Central Asia. While currently protected under a US sanctions waiver valid until April 2026, uncertainty remains about its future status under the new tariff regime.

Combined Tariff Impact Assessment

The new Iran-related tariffs compound existing trade pressures on Indian exporters, who already face elevated tariff rates on certain products shipped to the United States.

Analysts note that while the trade volume with Iran is relatively small, the tariff applies broadly to countries doing business with Iran rather than being limited to Iran-specific goods, creating wider implications for Indian exporters.

Analyst Perspectives on Market Impact

Financial experts suggest the market reaction reflects sentiment-driven concerns rather than fundamental economic disruption. India's export exposure to the US remains concentrated in specific segments including textiles, gems and jewelry, leather goods, and certain engineering products.

The rupee faces additional pressure from trade tensions, particularly affecting export-sensitive sectors. However, analysts emphasize that India's economy has become increasingly domestically oriented, with consumption, financials, infrastructure, and services sectors driven primarily by internal demand rather than US trade flows.

Outlook and Risk Assessment

Market observers anticipate that near-term impact should remain manageable due to India's limited Iran trade exposure and ongoing India-US negotiations. Export-linked stocks may experience short-term volatility, but the broader market structure is considered more resilient given its domestic anchoring compared to previous tariff cycles. A negotiated settlement remains the most likely medium-term outcome, which would help limit market disruption and reduce long-term risks for Indian exporters.