Trump’s Tariffs Spook Dalal Street: Nifty Drops Under 24,700 as Textiles, Autos Suffer; Jio Soars on Fundraise Plan

The Indian stock market started with a significant drop following U.S. President Donald Trump's announcement of 25% tariffs on imports from India, which took effect on August 1. This follows unsuccessful negotiations between the two countries over five sessions of trade discussions. Additionally, he introduced an unknown fine associated with India's purchase of Russian oil and defense equipment.

Nevertheless, the Indian government has stated that discussions will proceed at the beginning of the following month.

Meanwhile, in a post On Truth Social, Trump showed little concern about India's ties with Russia, implying that their economies could suffer simultaneously.

"We've conducted very limited trade with India, as their tariffs are excessively high, ranking among the highest globally. Similarly, Russia and the U.S. engage in minimal commercial activity. Let's maintain this status quo," he wrote.

At 9:50 AM IST, the Nifty 50 fell 161 points to 24,693, whereas the Sensex dropped 542 points to 80,939. The wider market also showed decline, as the Nifty Midcap and Smallcap indexes declined almost 1%.

Retail sentiment for Nifty has shifted back to 'neutral' after being 'bearish' earlier in the day.

. Stock Watch

In terms of sectors, all indexes closed lower, as energy, real estate, and technology experienced the biggest drops.

Tariffs imposed by Trump have caused declines in shares related to textiles, automobiles, and seafood. Faze3 decreased by 11%, with Gokaldas Exports, Pearl Global, and Kitex each dropping 5%, and Welspun Living falling 3%. Additional losses were seen in Bharat Forge and Avanti Feeds, both slipping 3%, while Apex Foods saw a 2% drop.

Hindustan Unilever stock rose 1% following the release of its June quarter financials which met market expectations. The company reported a net profit of ₹2,732 crore for Q1 and revenue reached ₹15,931 crore.

Additional stock performers are HEG with an increase of 10% and Sagility rising by 8%.

Jio Finance led the Nifty index with a 3% rise despite a sluggish market, following approval from its board for a proposal to secure as much as ₹15,825 crores via the preferential issue of 50 crore warrants.

In the meantime, Tata Motors declined by 1% after acquiring the Italian firm Iveco.

Be mindful of companies like Coal India, Sun Pharma, Maruti Suzuki, Eicher Motors, Adani Enterprises, Ambuja Cements, Swiggy, and PB Fintech, which will release their quarterly financial results today.

Markets: The Road Ahead

From a technical perspective, analysts registered with SEBI shared the trading strategy.

Ashish Kyal It was noted that following the 25% tariff imposed on India, the market's concerns about uncertainty have eased, suggesting that the worst may be behind us. After a downward gap, a period of consolidation might occur, potentially resulting in a move to fill this gap around 11:30 am, aiming for the Gann magnetic level close to 24,728, with possible further movement toward 24,760. Nevertheless, he cautioned investors. A closure below the crucial support level of 24,590 within 15 minutes would serve as a significant negative indicator, possibly signaling additional downward pressure in the short term.

Prabhat Mittal noted Nifty intra-day support levels at 24,650 and resistance at 25,020. Regarding Bank Nifty, he anticipates support around 55,700 and resistance near 56,400.

Saurab Jain acknowledged that the worst outcome is likely already reflected in market prices. He urged investors not to become alarmed if they own strong stocks. While markets can decline rapidly, they tend to rebound more effectively, he noted.

Global Cues

Around the world, excluding Japan, Asian markets closed lower despite the U.S. reaching a trade agreement with South Korea, which included a 15% tariff rate. Oil prices increased for the fourth day in a row due to investors' fears about possible reductions in supply. This anxiety comes from U.S. President Donald Trump's push to rapidly conclude the conflict in Ukraine and his warnings of applying tariffs on countries buying Russian oil.

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