Indian Markets Edge Lower Amid Tariff Tensions

By Mandar in Indian Market Insights —

Indian Stock Market Outlook for August 7, 2025

The Indian stock market is expected to have a cautious start on August 7, 2025, following three consecutive days of losses for the Sensex and Nifty. The market's current state is influenced by:

  • Trade Tensions: Concerns are rising due to U.S. President Donald Trump's announcement to double tariffs on Indian goods to 50%.
  • Investor Sentiment: This has negatively affected investor sentiment, leading to net selling by foreign portfolio investors.
  • Domestic Support: Domestic institutional investors have provided support by buying shares worth Rs 6,794 crore.

Yesterday's market decline occurred despite the Reserve Bank of India's Monetary Policy Committee decision, suggesting that the policy support was not enough to counteract trade concerns.

Market Performance and Technical Analysis

Nifty fell below key moving averages, and momentum indicators are displaying weakness, which warrants caution among traders.

Key Technical Levels:

  • Consolidation Range: Nifty is consolidating between 24,500 and 24,750.
  • Support: The 100-day exponential moving average (100-DEMA) at around 24,595 is a crucial support level.
  • Breakdown Scenario: Breakdown below 24,535-24,500 could lead to a decline towards the 24,300-24,250 support zone or the 200-day EMA at 24,200.
  • Resistance: Resistance levels are at 24,700 to 24,760, aligning with the 10-day EMA. Surpassing this level might signal a short-term rebound but could encounter selling pressure.

Sectoral Outlook

Today, important quarterly earnings are expected from these companies:

  • Titan Company
  • Life Insurance Corporation of India
  • Hindustan Petroleum
  • Hero MotoCorp

Hero MotoCorp reported a slight increase in profit but a decrease in revenue for Q1, demonstrating diverse sectoral trends.

Trading Strategy and Market Outlook

The 24,473 support level requires careful monitoring, as a firm breakdown could trigger significant corrections. The market sentiment remains weak because of uncertainties related to tariffs.

  • Approach: Market participants should anticipate a "sell on rise" strategy until the trade negotiations within the 21-day window, as provided by the U.S. government, bring clarity.
  • Recommendations for Investors: Investors must closely watch global cues, domestic policy announcements, and technical levels for proficiently navigating the unpredictable market.