By V K Sharma
After a brief reprieve in the April–June quarter, during which the Nifty gained 1,998 points or 8.5%, markets are once again reacting to Trump’s tariff tantrums.
The Nifty has dropped 1.90% over the past fortnight, with 1.22% of the loss coming in just last week. In the US as well, Friday’s declines dragged major indices into the red for the week. The Dow Jones Industrial Average fell 1%, while the S&P 500 and Nasdaq slipped 0.3% and 0.1%, respectively.
Trump continues to keep markets on edge with his sudden policy shifts. Investors are unsettled by his impulsive style, as he demands 25% tariffs from multiple countries simultaneously — without distinguishing between rivals and close allies like South Korea and Japan. Canada has been hit with a steep 35% tariff, while Brazil faces a punishing 50%.
India has so far played its cards well — reducing oil imports from Russia, Saudi Arabia, and Iraq, while doubling shipments from the United States. Despite the shift, Russia remains India’s top oil supplier, followed by Iraq and Saudi Arabia, with the US overtaking the UAE to become the fourth-largest. India has refused to yield to U.S. pressure on accepting dairy products, genetically modified seeds, or unrealistic deadlines. This measured, selective approach—prioritising what’s best for the country—is likely to pay off, especially as the US currently has no major trade deals to showcase.
The proposed tariffs are likely to be inflationary, complicating the Fed Chair’s task of cutting rates—something Trump is keen on. Despite a strong June jobs report, one Fed governor has suggested a rate cut should be considered at the July meeting. However, a September cut appears more likely.
Back home, the Nifty has been under pressure for the past fortnight. Its close at 25,149 is below key moving averages, and technical oscillators remain bearish. However, support is expected in the 24,840–24,870 zone. This is where trendlines 66 and 63 converge, as seen in the adjacent daily candlestick chart.
Trendline 66, drawn by connecting the highs of 25,116 (May 15) and 25,079 (May 26), indicates support at 24,840. Meanwhile, Trendline 63—based on the lows of 24,378 (May 12) and 24,462 (May 22)—offers support at 24,870. Together, the 24,840–24,870 zone is expected to act as a key support area. On the upside, resistance is seen at 25,524.
(The writer is a technical analyst and former head of client’s group, HDFC Securities)