Why Did Sensex and Nifty Open Lower Amid US Tariff Concerns?
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Synopsis
The Indian stock market faced a decline as Sensex and Nifty opened lower on fears stemming from a proposed 25% tariff on imports by the US. Investors are urged to stay informed about upcoming negotiations in mid-August that may impact tariffs. Key sectors and stocks are highlighted for potential buying opportunities amidst market volatility.
Key Takeaways
- 25% tariff on imports announced by the US.
- Sensex and Nifty opened lower, indicating market volatility.
- Major sectors facing declines include auto, energy, and pharma.
- Investors encouraged to focus on domestic consumption.
- Upcoming negotiations in mid-August could alter current tariff rates.
Mumbai, July 31 (NationPress) The Indian stock market's primary indices opened lower on Thursday following the announcement from US President Donald Trump regarding a hefty 25 percent tariff on imports from India.
As of 9:27 am, the Sensex had declined by 487 points or 0.60 percent to reach 80,994, while the Nifty fell 140 points or 0.57 percent to 24,717.
Midcap and smallcap stocks also experienced selling pressure. The Nifty midcap 100 index was down 457 points or 0.79 percent at 57,484, while the Nifty smallcap 100 index dropped 100 points or 0.55 percent to 18,037.
Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited, commented, "From an investor's viewpoint, it is critical to recognize that the 25 percent tariff may lessen following negotiations scheduled to begin in mid-August. The tariff levied against India is considerably higher than those established in trade agreements with other nations."
He described this as a typical "Trumpian strategy" aimed at securing better deals from India on various fronts, eventually settling at a tariff rate close to 20 percent or lower.
"The Nifty is unlikely to dip below the support level of 24,500. Investors should consider purchasing on dips, particularly focusing on domestic consumption sectors, especially key private sector banking names, telecom, capital goods, cement, hotels, and select auto manufacturers that performed well in Q1," he added.
All sectoral indices showed losses in early trading, with auto, energy, pharma, PSU bank, financial services, metal, realty, and PSE being the most affected.
Among the Sensex constituents, M&M, Bharti Airtel, Reliance, Infosys, HCL Tech, Titan, SBI, TCS, ICICI Bank, Trent, L&T, HDFC Bank, and NTPC were the biggest losers, while Eternal, Power Grid, Tata Steel, ITC, and HUL emerged as top gainers.
In terms of institutional actions, foreign institutional investors (FIIs) continued their selling trend for the eighth consecutive session on July 30, offloading equities valued at Rs 850 crore. In contrast, domestic institutional investors (DIIs) sustained their buying spree for the 18th straight session, acquiring equities worth Rs 1,829 crore on the same day.
Point of View
It is essential to approach the current market situation with a balanced perspective. The announcement of increased tariffs by the US presents both challenges and opportunities for Indian investors. While immediate reactions may lead to declines, the potential for negotiations offers a path toward resolution. Our commitment is to keep readers informed and equipped to make sound investment decisions amidst such fluctuations.
NationPress
31/07/2025
Frequently Asked Questions
What factors contributed to the decline in Sensex and Nifty?
The decline in Sensex and Nifty was primarily caused by the announcement of a 25% tariff on imports from the US, which raised concerns among investors about potential impacts on the Indian economy.
How should investors respond to the current market conditions?
Investors are advised to monitor the upcoming negotiations in mid-August closely. There may be opportunities to buy stocks in sectors that are likely to benefit from domestic consumption.
What sectors are currently underperforming?
In early trading, sectors such as auto, energy, pharma, PSU bank, financial services, metal, realty, and PSE were among the top laggards.
What is the overall outlook for the market?
While there is some selling pressure, analysts believe that the Nifty is unlikely to fall below the support level of 24,500, providing a potential buying opportunity for investors.
Who are the biggest losers and gainers in the Sensex pack?
The biggest losers included M&M, Bharti Airtel, Reliance, and Infosys, while top gainers were Eternal, Power Grid, Tata Steel, ITC, and HUL.
