The Indian stock market had a very volatile and dramatic session today as the impact of President Donald Trump’s newly introduced 25% tariffs on Indian exports created shockwaves on Dalal Street, which resulted in a turbulent start followed by partial recovery during the afternoon.
Opening Panic and Midday Recovery
At the opening bell, Sensex and Nifty 50 fell sharply—Sensex fell almost 787 points, or 0.96%, to its intraday low of 80,695.15, while the Nifty 50 dropped more than 220 points to a low of 24,635. Broader indices, such as the Nifty Midcap 100 and Nifty Smallcap 100, fell in between 1-1.5%.
But by mid-session, sentiment at the investors’ end calmed down partially. The indices recovered a large part of their intraday sell-off as expectations of potential negotiations between the US and India grew, with the Sensex cutting its plunge to close around 296 points down and the Nifty trading below 24,800. Markets indicated underlying resilience but volatility dominated the day.
Trump Tariffs’ Impact
President Trump’s move to slap a blanket 25% tariff ‘plus a penalty’ on all Indian exports—starting August 1—raised the spectre of heightened risk, especially for sectors that rely heavily on exports. Pharmaceuticals, electronics, gems and jewellery, and textiles stocks were worst-hit by selling pressure with further penalties on Indian traders dealing with Russia adding to investor nervousness.
In the opinion of VK Vijayakumar, Chief Investment Strategist, Geojit, “The 25% tariff plus unspecified penalties for Russian trade is very bad news for Indian exporters, particularly in industries such as pharma and textiles, probably pulling down GDP growth by up to 0.4% in the short term.” Moody’s Analytics pointed out that India’s relatively large domestic market could help absorb some of the shock.
What do the Experts Say
Market specialists point out that the worst can be far from over, with more volatility on the cards as the rupee and FII capital inflows face stress. Up to now, FIIs have apparently withdrawn around ₹25,000 crore over eight days of selling, mostly betting on tariff risks. Though US-India negotiations might lower tariffs post-mid-August, short-term weakness is predicted.
Future Outlook & Stocks to Watch
Analysts predict a turbulent market in the days to come, with the Nifty likely to trade between 24,600 and 25,010. Sectors dependent on US exports—pharmaceuticals (such as Sun Pharma, Lupin, Dr. Reddy’s), textiles, and IT—are likely to continue struggling. But defensive plays such as FMCG and some domestic consumer plays might outperform because they are relatively shielded from global shocks.
Stocks to watch :
- Tata Steel: Good Q1 profits, but volatility to be expected from global demand.
- Ajanta Pharma, Aurobindo Pharma: US pharma tariff-exposed, tracking advised.
- Mahindra & Mahindra, Maruti Suzuki: Action driven by results, sector rotation.
- Godrej Agrovet: Positive picture in agro-commodities.
Volatility in smallcaps is high; selective bets in those with good earnings and low US export exposure.
Conclusion
The day closed with a battered but resilient Indian market, weighing heavy global headwinds against domestic fundamentals. All eyes are still fixed on future US-India trade negotiations, the attitude of major foreign investors, and sectoral earnings, as the market adjusts to a new chapter in global economic interdependence.
