More Stories

Informist, Thursday, Mar. 27, 2025

By Gopika Balsubramanium

MUMBAI – Benchmark indices are likely to extend gains on Friday as they have managed to find support near key levels despite profit booking seen in the past few sessions. Sentiment is positive as foreign investors have been net buyers in the past few sessions, analysts said. 

Some analysts said the market has bottomed out and a partial impact of US tariffs is largely factored into stock prices. At the same time, some analysts said market may fall more, especially as the deadline for reciprocal tariffs is near. Analysts hope India will be able to strike a trade deal with the US, which would help limit the tariffs.    

Overnight, US President Donald Trump said foreign-built cars and their parts imported into the US would attract a 25% tariff, effective Apr. 3. Post this, shares of several automobile and automobile parts makers fell Thursday. Among them, Tata Motors was the worst hit and fell more than 5%.

This comes amid bilateral trade talks between Indian and US officials in Delhi that are likely to continue till Saturday. Analysts have said that India will likely negotiate its way and strike a deal where both countries are at an advantage.

Few media reports had claimed that India was ready to cut tariffs on 55% of US goods it imports. However, Santosh Sarangi, director general of foreign trade, dismissed these media reports, calling them as "guesswork." He said that one should not "go by reports" and added that teams of both countries are in talks for a bilateral agreement. Both leaders have agreed to conclude it by the end of fall, which is Sept-Oct, he said.

That said, Pankaj Karde, head of research at Asit C Mehta Financial Services, said one should not worry about automobile tariffs as India does not export on a large scale to the US. However, there are some auto-part makers who will face the brunt of the tariffs, he said. 

Companies such as Samvardhana Motherson, Ramkrishna Forgings, and Sona BLW Precision Forgings have some exposure to the US market. Analysts said some of them also have plants in Mexico and other parts of South America, and are likely to be under pressure, as it would affect their margins and profitability. "This (tariff) could have a greater impact on companies like Sona Comstar (~43% revenue from North America) and Samvardhana Motherson (~18% revenue contribution). However, most other component manufacturers have a well-diversified export presence, which could mitigate the overall impact," Mrunmayee Jogalekar, research analyst at Asit C Mehta Investment Interrmediates, said in a note.

Some analysts noted Tata Motors does not sell its cars directly to the US but its subsidiary, Jaguar Land Rover, will have an impact due to these tariffs. The US holds a 22% share of JLR's total sales, according to its annual report for the financial year 2023-24. Some correction is expected in the stock in the near-term, analysts said, and will likely have to look at what the management has to say post March quarter earnings.

Investors will now anticipate the verdict on the pharmaceutical imports to the US. Dr Reddy's Laboratories and Sun Pharmaceutical Industries have huge exposure to the US. Analysts said the quantum of tariffs will likely be lower for pharmaceutical products as the US is dependent on India for generic drugs. They also said that most companies are ready to battle the tariff-related costs by partly absorbing them and by passing them on to the users.  

Coming back to indices, Thursday, the Nifty 50 closed at 23591.95 points, up 0.5% and the BSE Sensex closed at 77606.43 points, up 0.4%. Broader indices also gained momentum and closed higher. Except for Nifty Auto, Nifty Pharma, and Nifty Healthcare, all other sectoral indices closed higher. The Nifty 50 is expected to find support at 23400 and face resistance at 23800, Brijesh Ail, head technical & derivatives at IDBI Capital Markets & Securities, said. 

Investors await for the US unemployment insurance weekly claims data, due later Thursday, which will help them assess the health of the US economy amid concerns of a slowdown due to Trump's trade policies. The US's fourth quarter GDP data, which is due Friday, is also eyed.  End

US$1 = INR 85.78

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Deepshikha Bhardwaj

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

© Informist Media Pvt. Ltd. 2025. All rights reserved.