Markets Slide As Trump’s Tariff Threat Hits Investor Sentiment

Indian stock markets opened lower on Thursday morning following an unexpected announcement by US President Donald Trump to impose a 25% tariff on imports from India, triggering investor concerns and prompting widespread selling.

By 9:27 AM, the benchmark indices reflected the downturn, with the BSE Sensex shedding 487 points, or 0.60%, to trade at 80,994. The NSE Nifty also dropped by 140 points, or 0.57%, settling at 24,717.

Broader market segments did not escape the pressure. The Nifty Midcap 100 index fell 457 points (0.79%) to 57,484, while the Nifty Smallcap 100 lost 100 points (0.55%) to stand at 18,037.

“From the investor perspective, it is important to understand that the 25 per cent tariff will come down after the negotiations, which start in mid-August. Tariff imposed on India is far higher than the rates reached in trade deals with other countries,” stated Dr VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

He noted that the new tariffs are significantly steeper than those India has faced in other bilateral trade agreements and emphasised the importance of mid-August negotiations.

Vijayakumar further noted, “Nifty is unlikely to go below the support level of 24,500. Investors can buy the dip focusing on domestic consumption themes, particularly segments like leading private sector banking names, telecom, capital goods, cement, hotels, and select autos, which have done well in Q1.”

Sectoral Weakness and Institutional Flows

Sectoral indices reflected widespread weakness during early trade, with auto, energy, pharma, PSU banks, financials, metals, realty, and public sector enterprises (PSEs) all posting losses.

Among the major stocks on the Sensex, M&M, Bharti Airtel, Reliance, Infosys, HCL Tech, Titan, SBI, TCS, ICICI Bank, Trent, L&T, HDFC Bank, and NTPC saw declines. On the flip side, Power Grid, Tata Steel, ITC, and HUL recorded modest gains.

In terms of institutional flows, foreign investors continued their selling spree for an eighth consecutive session on July 30, withdrawing Rs 850 crore from equities.

Meanwhile, domestic institutional investors remained bullish, net buying stocks worth Rs 1,829 crore, extending their streak to 18 straight sessions.

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