Share Market News / It fell but did not break! Indian market recovered even after Trump's tariff

Share Market News: US President Donald Trump's announcement of imposing 25% tariff on India on Thursday morning shook the Indian stock market. Sensex and Nifty fell by about 1% in early trade. Sensex slipped 814 points to 80,695, while Nifty fell to 24,635. However, the market soon recovered itself and started recovering on the back of buying by investors. Analysts believe that this tariff is not permanent and it is likely to be softened in the India-US trade talks to be held in late August.

Strictest tariff on India

The 25% tariff imposed by the Trump administration is considered to be the strictest in Asia. Comparatively, 20% tariffs have been imposed on Vietnam, 19% on Indonesia and the Philippines. Apart from this, additional penalty has also been talked about on India regarding relations with Russia. Nevertheless, experts say that this decision is not going to last long. Trade talks between India and the US are going to take place soon, in which tariff reduction is expected.

Which sectors were affected?

The biggest impact of this tariff was seen on auto parts, pharmaceutical, refinery, textile, solar, chemical and some manufacturing companies. However, financial, technology and domestic consumption based companies remained relatively safe from this shock. Analysts suggest that this decline should be considered as a buying opportunity. Especially the companies of banking, telecom, capital goods, cement, hotel and auto sectors, which performed well in the first quarter, are attractive for investment.

FII selling and market pressure

In the last eight days, foreign institutional investors (FII) have withdrawn about Rs 25,000 crore from the Indian market, increasing the pressure on the market. Nevertheless, the confidence of long-term investors is still intact. Experts believe that the fall in the rupee can benefit the IT sector, which can perform better in the future. Brokerage firms say that the current tariff reflects the worst scenario and the final agreement may be at lower rates.

Opinion of brokerage firms

Nomura (Sonal Verma): India has seriously considered every aspect of the trade agreement. The US delegation will visit India at the end of August, till then it is not right to consider the tariff as permanent.

Geojit (VK Vijaykumar): This tariff is part of Trump's strategy to get a better deal from India. Nifty is unlikely to go below 24,500. Investors should focus on sectors related to domestic consumption.

Emkay (Madhavi Arora): The tariff will not have much impact on the earnings of the second half of FY26. This decline is an opportunity for consumer and industrial companies to enter the market.

Opportunity with fear

Trump's tariff did give an initial setback to the Indian market, but the rapid recovery has raised hopes among investors. Now all eyes are on the India-US trade talks to be held in August. Till then the advice for investors is to not panic, but remain cautious.