🔆Current context: Impact of US trade policy changes under the former president on Indian stock markets, foreign investment flows, and the outlook for the near term. Key points: ✅US tariffs: The former US president imposed tariffs on steel and aluminum imports, leading to concerns about potential dumping of Asian exports into India. ✅Indian markets reaction: Indian markets reacted negatively due to apprehensions about the tariff regime and its potential impact on trade and global growth. ✅Foreign investment outflow: Foreign institutional investors (FIIs) have been selling off their holdings in Indian equities and moving towards US bonds due to higher returns and perceived safety. ✅Bond yields and stock markets: The inverse relationship between bond yields and stock markets is highlighted. Rising US bond yields attract foreign investment away from Indian equities. ✅Domestic factors: Domestic earnings growth, valuations, inflation, and economic/political uncertainty are also contributing factors to the market downturn. ✅Outlook: The near-term outlook is uncertain due to potential trade wars, geopolitical tensions, and concerns about global growth. FIIs are expected to return to India when growth and earnings recover and the dollar weakens. Possible Questions: ✅Prelims: Which of the following is/are a factor(s) contributing to the downturn in Indian stock markets mentioned in the article? US tariffs on steel and aluminum imports Outflow of foreign institutional investors Domestic earnings growth (a) 1 only (b) 1 and 2 only (c) 2 and 3 only (d) 1, 2 and 3 ✅Mains: "The policies of the former US president have had a significant impact on Indian stock markets and foreign investment flows." Discuss this statement with reference to the information provided in the article.