Despite US President Donald Trump imposing various trade duties on the country's major trading partners, including India, in the current calendar year (from Jan’25 to September 15, 2025), stock indices of emerging markets have performed well, according to Bank of Baroda's latest report.

"Vietnam, Hong Kong, China, Brazil and Japan have all registered double-digit increases so far. Markets in the UK and Indonesia have also fared well, supported by trade agreements secured with the US. Within the US, the S&P 500 has given better returns than the Dow Jones. Indian markets have also delivered positive returns in these uncertain times," writes Sonal Badhan, economist, BoB.

However, only the Stock Exchange of Thailand (SET) in BoB's sample has so far recorded negative returns. In the initial period (Jan-Apr), when countries and sectors received an initial jolt of tariffs, most markets fell. Only stock indices in Hong Kong, Brazil, India, and China were able to deliver positive returns, while all others fell.

In the second phase, between Apr-Sep’25 period (till 15 Sep), when there was a period of pause and a couple of countries secured a trade deal with the US, equity indices rebounded, as shown in the data. Apart from the US (S&P 500 and Dow Jones), Vietnam, Japan, Indonesia, Hong Kong, China, the UK, and Thailand posted double-digit growth. 

Indian stock indices also inched up, but at a slower pace due to the announcement of an additional 25% tariff by the US on Indian imports. However, strong domestic fundamentals and the GST bonanza helped maintain positive momentum. 

In terms of how much money in absolute terms was lost or gained due to tariff-related decisions, the BoB report says in the US, the market cap of Dow Jones in CYTD25 so far (Jan-Sep’25) has risen by $2 trillion, mainly due to gains made in the Apr-Sep’25 period. 

Market cap of S&P500 has risen more sharply by $4.9 trillion. In percentage terms, the market cap of Dow Jones has grown by 10.3% and that of S&P500 is up by 9.1%. In comparison, in CYTD25 so far, market cap of Sensex has risen by $66.5bn (3.8%), of FTSE by $463.6bn (16.6%), of Nikkei by $756.4 billion (16.3%) and of Shanghai Comp by $1.6tn (22.6%).

Between Jan and Apr’25, the market cap of US markets (Dow Jones and S&P500) was hit the most as $6.1tn was wiped out. "Markets made up for this loss in the Apr-Sep’25 period, when market cap went up by $12.9 trillion. In China, the market cap of the Shanghai Comp rose by only $51.3 billion between Jan-Apr’25, while it jumped by $1.5 trillion when a truce was announced with the US regarding the trade war. FTSE ($158.7bn) and Nikkei (US$120.4 bn) also reported smaller gains in Jan-Apr’25 versus the Apr-Sep’25 period," writes Badhan.

On Indian imports, the impact of this was cushioned by strong domestic fundamentals, which have been supported by robust domestic consumption and the announcement of GST 2.0 to provide a further boost to growth. 

The report says Sensex, on the other hand, noted a slightly different trend as it registered $79.3 billion increase in market cap in Jan-Apr’25 period versus a loss of $12.8 bn between Apr-end and Sep’25. Apart from being impacted by additional 25% tariffs announced by the US on India, the exchange rate could have also played a part in calculating the valuation, finds the report. "In India, GST support and front-loading of rate cuts by the RBI will be supportive of growth and would help cushion Indian equity markets from external shocks."