Will Sensex and Nifty Recover Amid Trump’s New Tariff Threat?

New Delhi, Aug 5 (NationPress) The Indian stock market opened on a cautious note on Tuesday due to a renewed threat from US President Donald Trump regarding increased tariffs on India linked to its oil purchases from Russia.

The Sensex fell by 199 points or 0.25 percent to reach 80,819 by 9:30 AM. Meanwhile, the Nifty saw a decline of 44.05 points or 0.18 percent, settling at 24,678.70.

In the midcap space, the Nifty midcap 100 index dropped by 0.17 percent, while the Nifty smallcap 100 index showed a slight increase of 0.19 percent.

Sector-wise, the Nifty FMCG index recorded the most significant drop, falling 0.55 percent. Other indices like Nifty Bank and Nifty IT also faced declines of 0.12 percent and 0.25 percent respectively.

“From a technical perspective, if the Nifty surpasses the high of 24,956, it may reverse the current downtrend. Until that happens, the bearish sentiment prevails,” commented Vikram Kasat, Head - Advisory at PL Capital.

The immediate support levels for Nifty are identified at 24,550 and 24,442, with resistance levels at 24,900 and 25,000. Maintaining above 24,600 could lead to a rebound towards the resistance zones, while further supports can be expected at 24,550 and 24,442,” he added.

Investors are advised to stay vigilant for upcoming developments, and consider reallocating some funds into fixed income instruments, as per analysts’ recommendations.

Positive domestic economic indicators and anticipation of a 25 basis points rate cut during the RBI's credit policy meeting might provide some relief to the markets, they noted.

However, concerns persist following President Trump's tariff threats, which may negatively impact market sentiment.

Among Nifty constituents, key gainers included Coal India, Maruti Suzuki, SBI, and Dr. Reddy’s Laboratories, while major laggards were HDFC Bank, Reliance Industries, Hindustan Unilever (HUL), ICICI Bank, and Tata Consumer Products.

In the US, markets rebounded strongly overnight, with the Dow Jones rising by 1.34 percent, the Nasdaq Composite up by 1.95 percent, and the S&P 500 increasing by 1.47 percent.

“There is growing confidence among bulls that the US Federal Reserve will likely implement a rate cut in September, with the probability of such an action increasing to 92.1 percent from below 40 percent just last Friday, following the July employment report,” Kasat remarked.

Asian markets opened positively as well, with South Korea's Kospi 200 rising 1.09 percent, China's Shanghai Composite gaining 0.52 percent, Japan’s Nikkei 225 up by 0.63 percent, and Hong Kong’s Hang Seng Index increasing by 0.14 percent.

On Monday, foreign portfolio investors (FPIs) were net sellers, offloading Indian equities worth Rs 2,566 crore, while domestic institutional investors (DIIs) made net purchases worth Rs 4,386 crore.

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