Indian Markets Open Weak Amid Tariff Concerns

By Mandar in Indian Market Insights —

Market Downturn Following U.S. Tariff Announcement

The Indian stock markets experienced a weak start to Thursday's trading session, influenced by concerns over new U.S. tariffs on Indian exports. After a 1% increase on Wednesday, major benchmarks are now projected to open with substantial declines.

On July 30, the Sensex closed at 81,481.86, up by 143.91 points, and the Nifty reached 24,855.05, gaining 33.95 points. This positive performance was mainly due to gains in specific sectors.

  • Key Sector Performances:
    • IT, FMCG, consumer durables, and capital goods sectors showed gains.
    • Auto, PSU banks, and realty sectors faced selling pressure.

Notable stock movements:

  • Gainers: L&T, Tata Consumer, NTPC, Sun Pharma, and Maruti Suzuki.
  • Laggards: Tata Motors, Hero MotoCorp, Power Grid Corp, and Bajaj Auto.

U.S. Tariff Impact

The market's positive trend was reversed by U.S. President Donald Trump's announcement of a 25% tariff plus penalties on Indian exports. This decision was attributed to India's purchases of Russian military equipment and oil, along with India's high import tariffs.

  • The GIFT Nifty futures indicated a sharp drop of 0.7% at the start of trading, reflecting investor concern.
  • Sectors like textiles, pharmaceuticals, and automotive components are expected to be most affected.

Market Outlook and Strategy

Experts predict that investor sentiment will remain cautious in the near term. Technical analysis provides insights into market structure.

  • Key Levels:
    • Nifty's support is just below 24,800.
    • Immediate resistance is near Wednesday's close around 24,850.
  • Traders should closely monitor these levels due to expected volatility from F&O expiry and global influences.

In summary, the market environment is currently affected by trade tensions, necessitating a balance between domestic sector optimism and geopolitical realities for investors.