Indian Market Ends Lower On Tariff Concerns

By Mandar in Indian Market Insights —

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Indian Stock Market Overview - July 31, 2025

The Indian stock market concluded the trading day on July 31, 2025, with a downward trend. Both the Nifty 50 and the Sensex experienced declines for the second consecutive session. The overall market sentiment reflected caution, primarily due to the imposition of a 25% tariff on Indian goods.

The increased tariff triggered significant volatility, as indicated by a spike in the India VIX index, which rose by over 7%, signaling increased investor nervousness.

Key Market Highlights

  • The Nifty 50 closed below the 24,800 mark, finishing at approximately 24,793, after failing to maintain earlier gains from July 30.
  • The Sensex decreased by around 296 points (0.36%), continuing the negative trend after a volatile expiry session.
  • Sectoral performance was varied, with the auto, PSU banks, and realty sectors showing declines of about 0.5% each. Sectors like IT, FMCG, consumer durables, and capital goods, while showing prior gains, faced pressure due to the tariff news.
  • Shares of Mahindra & Mahindra fell, despite strong quarterly earnings, indicating cautious sentiment in the auto sector.
  • Technical indicators show key support levels for the Nifty around 24,600-24,650, with resistance near 24,900-25,000. The index remained below its 50-day and 20-day exponential moving averages (EMA), suggesting potential testing of support levels in the upcoming sessions.

Notable Actions and Recommendations

  1. Monitor Nifty's Support Zone:Pay close attention to the support levels around 24,600-24,650. A breach below this could lead to further downward movement.
  2. Watch for Resistance:Observe the resistance levels near 24,900-25,000. Sustainable movement above this level is necessary for a recovery.
  3. Evaluate Tariff Impact:Assess the effect of the tariffs on export-oriented sectors. The auto and consumer durables sectors are currently experiencing immediate pressure.
  4. Track Volatility Indicators:Keep an eye on volatility indicators like the India VIX. The current spike indicates increased market uncertainty.
  5. Focus on Earnings Momentum:Despite the overall market weakness, consider stocks with strong fundamentals. Stocks like M&M may present strategic opportunities if the impact of the tariffs is effectively managed.

In conclusion, the Indian market faces a cautious short-term outlook due to geopolitical developments impacting trade policies. Investors should vigilantly monitor technical support levels and sector-specific news to navigate the prevailing volatility effectively.

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