Trump's Trade Tariff Rattles Dalal Street: Nifty Slips Below 24,700; Textiles & Autos Hit, Jio Financial Gains On FundRaise Plans

Indian equity markets opened with a sharp fall after U.S. President Donald Trump imposed 25% tariffs on India, effective August 1. This comes after the two nations failed to reach an agreement after five rounds of trade talks. He also imposed an unspecified penalty related to India’s acquisition of Russian oil and military supplies. 

However, the Indian government has said that the negotiations will continue early next month. 

Meanwhile, in a post on Truth Social, Trump expressed indifference regarding India's relationship with Russia, suggesting that their economies can decline together. 

“ We have done very little business with India, their Tariffs are too high, among the highest in the World. Likewise, Russia and the USA do almost no business together. Let’s keep it that way,” he wrote.

At 09:50 a.m. IST, the Nifty 50 traded 161 points lower at 24,693, while the Sensex fell 542 points at 80,939. Broader markets mirrored the weakness, with the Nifty Midcap and Smallcap indices falling nearly 1%.

The retail sentiment on Stocktwits for Nifty has recovered to 'neutral' from ‘bearish’ earlier in the day

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Sectorally, all indices traded in the red, with energy, real estate and IT leading the decline.

Trump’s tariffs have dragged textiles, autos, and seafood-related stocks lower. Faze3 dropped 11%, Gokaldas Exports, Pearl Global, and Kitex fell 5%, and Welspun Living declined 3%. Other casualties include Bharat Forge and Avanti Feeds, which fell 3%, while Apex Foods was down 2%. 

Hindustan Unilever shares inched 1% higher after reporting June quarter earnings that came in line with street estimates. Q1 net profit came in at ₹2,732 crore and revenue at ₹15,931 crore. 

Other earnings movers include HEG (+10%) and Sagility (+8%).

Jio Financial was the top Nifty gainer, surging 3% in a weak market after its board approved the plan to raise up to ₹15,825 crore through the preferential issuance of 50 crore warrants. 

Meanwhile, Tata Motors fell 1% following its acquisition of Italian company Iveco. 

Watch out for Coal India, Sun Pharma, Maruti Suzuki, Eicher Motors, Adani Enterprises, Ambuja Cements, Swiggy, PB Fintech, among others, as they report quarterly earnings today. 

Markets: The Road Ahead

From a technical standpoint, SEBI-registered analysts on Stocktwits shared the trade setup. 

Ashish Kyal noted that with the 25% tariff imposition on India, the market’s fears of uncertainty with the worst is over now. Following the gap down, a consolidation phase could develop, leading to an attempt to cover this gap around 11:30 am, with a target at the Gann magnet level near 24,728, and a potential extension to 24,760. However, he advised caution.  A 15-minute closing below the key support level of 24,590 is a notable bearish signal and could indicate further downside momentum in the near term.

Prabhat Mittal identified Nifty intraday support at 24,650 and resistance at 25,020. For the Bank Nifty, he sees support at 55,700 and resistance at 56,400.

Saurab Jain noted that the worst is probably already priced in by the markets. He advised investors not to panic if they hold quality stocks. Markets may fall fast, but they also recover smarter, he added.

Global Cues

Globally, barring Japanese markets, the rest of Asia traded in the red even as the US inked a trade deal with South Korea, imposing 15% tariffs. Crude oil prices rose for the fourth consecutive day, driven by investor concerns over potential supply shortages. These worries stem from U.S. President Donald Trump's efforts to quickly end the war in Ukraine and his threats of imposing tariffs on nations that purchase Russian oil.

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