Why Did the Indian Stock Market Decline Amid Fresh US Tariff Threats?
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Synopsis
The Indian stock market saw a downturn on Monday, influenced by fresh US tariff threats and considerable selling in IT stocks. This article delves into the factors behind the decline and what it means for investors amidst rising global trade tensions.
Key Takeaways
- Indian stock market closed lower amidst US tariff threats.
- IT stocks faced significant selling pressure.
- Market sentiment is influenced by global trade tensions.
- Technical support is seen at 24,900–24,950.
- Investors are awaiting crucial CPI data.
Mumbai, July 14 (NationPress) The Indian stock market concluded the initial trading session of the week on a down note on Monday, driven by declines in IT stocks and escalating global trade tensions due to new US tariff threats.
The Sensex wrapped up at 82,253.46, losing 247.01 points or 0.30 percent compared to the previous close of 82,500.47.
Although the 30-share index started positively at 82,537.87, it sank to an intraday low of 82,010.38 as selling pressure hit IT firms such as TCS and Tech Mahindra.
The Nifty index ended at 25,082.30, down 67.55 points or 0.27 percent.
Notable losers from the Sensex included TCS, Tech Mahindra, Infosys, Asian Paints, HCL Tech, Reliance Industries, Bajaj Finance, Tata Motors, and Kotak Bank.
On the flip side, stocks like Eternal, Adani Ports, Titan, Mahindra and Mahindra, and ITC ended in the green.
In Nifty, 22 stocks saw gains, 27 faced losses, and one remained unchanged.
According to Sundar Kewat from Ashika Institutional Equity, "The downturn was mainly fueled by renewed global trade strains, as the US declared plans to impose a 30 percent tariff on numerous imports from the EU and Mexico starting August 1, amidst ongoing negotiations."
In contrast, trading in heavyweights was lackluster, while broader indices like Nifty Smallcap 100 and Nifty Midcap 100 witnessed significant rallies. Nifty Smallcap 100 surged 1.02 percent or 191.50 points, while Nifty Midcap 100 closed up 410.35 points or 0.70 percent.
The Nifty IT fell by 419 points or 1.11 percent, whereas indices like Nifty Auto, Nifty FMCG, and Nifty Bank ended positively.
The Indian rupee weakened in response to the new tariff threats from US President Donald Trump.
Dilip Parmar from HDFC Securities remarked, "These threats have heightened global trade tensions, resulting in increased risk aversion among investors, which has also affected other Asian currencies."
Rupak De from LKP Securities noted that market participants are looking forward to CPI data from both India and the US, which is dampening overall market sentiment.
From a technical perspective, the index dipped towards 25,000 intraday, nearing the 50-DMA. Support is expected at 24,900–24,950. If this level holds, a rally towards 25,350 could occur. However, failing to maintain above 24,900 may lead to a deeper correction phase,” he added.
Point of View
It is crucial to approach the situation with a balanced perspective. While external factors like US tariff threats contribute to market volatility, it is essential for investors to stay informed and make decisions based on comprehensive analysis. The current climate calls for caution and strategic planning, ensuring that long-term goals remain in focus amidst short-term fluctuations.
NationPress
14/07/2025
Frequently Asked Questions
What caused the fall in the Indian stock market?
The decline in the Indian stock market was primarily due to selling in IT stocks and renewed global trade tensions stemming from US tariff threats.
How did the Sensex perform?
The Sensex closed at 82,253.46, down 247.01 points or 0.30 percent from the previous session.
Which sectors were affected the most?
The IT sector was significantly impacted, with major players like TCS and Tech Mahindra facing considerable selling pressure.
What is the outlook for the Indian stock market?
Market participants are closely watching upcoming CPI data and key support levels. A hold above 24,900 could signal potential recovery.
How do US tariffs affect the Indian market?
US tariffs escalate global trade tensions, creating risk aversion among investors and impacting currency values, which in turn affects the Indian stock market.
