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Informist, Wednesday, Jul. 30, 2025

 

By Gopika Balasubramanium and Anjana Therese Antony

 

MUMBAI – US President Donald Trump announcing 25% tariff and a penalty on India is likely to weigh on the domestic equity market Thursday. The move is likely to be a double whammy for a market that has been seeing near-term weakness with expensive valuations and no major positive surprise in corporate financial results so far. The market had not reacted negatively to media reports earlier Wednesday that Trump had hinted at 20-25% import duty on goods from India from Aug. 1.

 

After market hours Wednesday, Trump announced his tariff for India, which is slightly lower than the 26% he had announced in April. He said India has the most strenuous and obnoxious non-monetary trade barriers of any country. The country will also pay a penalty over the 25% tariff for its procurement of military equipment and energy from Russia. "They (India) have always bought a vast majority of their military equipment from Russia, and are Russia's largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE," Trump said on his social media platform Truth Social.

 

Export-driven sectors, including automobiles and pharmaceuticals, are likely to be hit in the near-to-medium term, but domestic fund flows are likely to support the market. Analysts are not expecting any major growth in earnings for the next quarter or two owing to the hit from tariffs, muted demand, and higher input costs. These, coupled with foreign investors increasing their short positions in the past few months, have been weighing on the market.

 

"It is a big negative for the market and we may see a fall below 24000 points in the coming days," Dharmesh Kant, head of research at Cholamandalam Securities, said. "However, it is possible the fall may not be that sharp... there is support from domestic flows. This (25% tariff) shows he (Trump) wants entry into our agriculture sector."

 

Echoing the view, Vipin Kumar, assistant vice-president of equity research and senior derivatives analyst at Globe Capital Market, said he, too, expects the Nifty 50 to reach the 24000 level in the near term. "The breakdown that occurred last Friday has down (support) targets around 24200-24000 spot levels," he said.

 

Investors will also keep an eye out for comments from US Federal Reserve Chair Jerome Powell on the health of the US economy and future rate-cut actions. The Fed is expected to keep the Federal funds rate unchanged at 4.25-4.50% late Wednesday. Traders now see a 65% probability of the Fed cutting rates by 25 basis points at its September meeting.  

 

Wednesday, the Nifty 50 ended at 24855.05 points, up 33.95 points. The BSE Sensex closed at 81481.86 points, up 143.91 points or 0.2%. These indices were higher for the second straight session after having closed in the red for three consecutive sessions.

 

On the earnings front, six Nifty 50 constituents will declare their June quarter earnings Thursday. Mahindra & Mahindra advanced by a day from Thursday its board meeting to consider the June quarter financial results and announced them Wednesday after market hours. Following the announcement of earlier release of the earnings, the stock had reversed gains and closed only slightly higher. The stock is expected to move in the range of INR 3,100-INR 3,260. 

 

The automobile company reported strong earnings metrics for the June quarter, beating analysts' estimates for bottom line as well as top line. The robust earnings were driven by growth in the company's sales and improved market share in the automotive and farm segments.

 

Other automobile majors--Eicher Motors and Maruti Suzuki India--will declare their results Thursday. Maruti Suzuki is expected to report moderate single-digit growth in revenue for the June quarter. According to analysts, the net profit of the WagonR-maker will contract for the third time in four quarters. The stock is expected to move between INR 12,300 and INR 12,800 ahead of the results. The net profit of Eicher Motors is expected to be in the low single digit for the June quarter. The stock is expected to move between INR 5,350 and INR 5,565.

 

Other large-cap companies Adani Enterprises, Coal India, Hindustan Unilever, and Sun Pharmaceutical Industries will also report their earnings Thursday. Ambuja Cements, Cholamandalam Investment and Finance Co., Dabur India, JSW Energy, Swiggy, TVS Motor Co., Vedanta, Mankind Pharma, And PB Fintech will also declare their results Thursday.  End

 

With inputs from Anshul Choudhary

Edited by Rajeev Pai
 

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