Trump’s Tariff Shock: Indian Markets Weather Sixth Straight Week of Declines

Trump's imposition of hefty tariffs on dozens of countries and a weaker-than-expected jobs report triggered concerns over economic growth. However, US markets recovered steadily, helped by strong quarterly earnings and lower volatility levels compared to earlier months.

Technology stocks such as Nvidia and Apple led the rally, with Nvidia benefiting from renewed sales to China and Apple announcing significant domestic investment. By the end of the week, the Nasdaq hit record closing highs for two consecutive days, surging on tech gains and optimism about potential interest rate cuts.

Another area of focus was on the seemingly increasing likelihood of the Federal Reserve lowering interest rates at its next meeting in September. Several Fed officials made comments during the week suggesting rate cuts could be in September.

The Indian stock market faced a challenging week marked by overall declines for the sixth consecutive week amid continuing investor concerns due to US tariff hikes and geopolitical tensions.

Donald Trump’s decision this week to impose a 50% tariff on Indian exports caused significant turmoil in Indian financial markets. Indian markets endured their sixth consecutive weekly decline amid Trump's 50% tariff imposition on Indian exports, triggering considerable turmoil. Export-oriented sectors, including textiles, gems, chemicals, auto ancillaries, and seafood, bore the brunt, disadvantaging Indian goods against competitors like Bangladesh and Ecuador.

Nifty is likely to encounter an immediate resistance around 24500-24600 levels, followed by 24800 levels, at which we’ve seen call writing in the weekly expiry. Traders are advised to remain cautious till Nifty closes above the 24800 levels. On the downside, considering an oversold level of FIIs’ long to short ratio, a near-oversold level of Nifty open interest put call ratio and Put writing at 24200-24300 levels, suggests immediate support in this range, followed by 24000 levels.

Any close below 24000 levels would result in further long unwinding and short build-up, which might drag Nifty to 23500-23700 levels.

Indian markets are poised to open mildly subdued as investors stayed cautious ahead of key economic data this week and a looming deadline for the potential extension of US tariffs on Chinese exports.