The Indian stock market bounced back into the green after opening in the red, reacting to US President Donald Trump’s 25% tariff on Indian imports. Despite early jitters, the Sensex climbed 143 points to 81,625.19, while the Nifty rose 38.95 points to 24,894.00 by mid-session.
Indian equity indices have recovered from early lows after they opened gap-down on Thursday. This was in reaction to US President Donald Trump announcing the imposition of a 25% tariff on Indian imports plus a penalty for buying Russian oil. The NSE Nifty 50 opened 182 points lower to 24,675. The BSE Sensex opened 575 points lower at 80,900. The Nifty has sice then recovered significantly. It is now trading close to 24,800 levels, over 175 points off early lows.
Similarly, Bank Nifty opened 300 points or 0.54% lower at 55,545. The small and midcap stocks saw the highest selling pressure. The Nifty Midcap fell 765 points to 57,177.
“The 25 % tariff on India, plus an unspecified penalty for energy and defence-related purchases from Russia, is very bad news for Indian exports and thereby on the growth prospects of the Indian economy in the short run. Since trade negotiations with India are continuing, perhaps the 25% tariff may come down eventually. But certainly, there is a short-term hit to Indian exports and GDP growth. This short-term hit will reflect in the stock market, too, in the short term,” said VK Vijayakumar, Chief Investment Strategist at Geojit Investments.
Talking over the broader aspect, Ajay Bagga,a market veteran, added that “the 25% punitive tariffs on India with the threat of secondary tariffs due to buying Russian oil will have a short term impact on Indian markets. India exports $87 billion of goods to the US while importing $45 billion of goods from the US. Hopes are high that this is yet another maximalist posturing by Trump, and like with the EU, Japan and Korea, the final tariffs will be nearer to 15%. However, given India’s reluctance to open its agricultural and diary sector to US GM exports, it is not a like to like comparison.”
Bagga added that “wo positive trade developments were that the tariffs on South Korea have been reduced to 15% from the threatened 25%, and the Brazilian tariffs of 50% have been delayed by 7 days, while a long list of goods have been excluded from these tariffs. The copper market is in a tizzy as the 50% tariffs on copper have been implemented while excluding refined copper/cathodes. Copper in the US market fell by 20% as a result.”
Let’s take a look at the key factors to watch out for today’s trading session
Early gainers and laggards
In early trade, among the Nifty 50, top gainers at this hour were SBI Life Insurance, Zomato (Eternal), and Jio Financial Services. On the flip side, the key laggards in the Nifty 50 pack included Tata Motors, Reliance Industries, Titan, Eicher Motors, and Dr Reddy’s Laboratories.
Major movers on Thursday
The stocks that remained under pressure included Reliance Industries, ICICI Bank, Bharti Airtel, HDFC Bank, and Mahindra & Mahindra, which were the major movers in the morning trade.
US imposes 25% tariff on India
The US President Donald Trump on Wednesday announced that Indian imports will see a 25% tariff from August 1, “plus a penalty”, citing India’s purchases of energy and military equipment from Russia, its high tariffs, and its “strenuous and obnoxious” non-monetary barriers to trade. “When the US had initially imposed tariffs, we had lowered our forecast of India’s GDP expansion to 6.2% for FY2026, presuming a tepid rise in exports and a delay in private capex. The tariff (and penalty) now proposed by the US is higher than what we had anticipated, and is therefore likely to pose a headwind to India’s GDP growth. The extent of the downside will depend on the size of the penalties imposed,” said Aditi Nayar, Chief Economist at ICRA.