- Indian markets decline amid global tariff tensions and weak IT earnings.
- Dow futures drop following Trump’s 30% tariff decision.
- Nifty approaches critical support near 25,000, raising volatility fears.
Global equity markets took a sharp turn downward after former U.S. President Donald Trump announced a 30% tariff on imports from the European Union and Mexico, effective August 1.
Indian markets mirrored this global sentiment, with benchmark indices slipping further into the red. The BSE Sensex fell by 337 points to close at 82,182, while the Nifty 50 breached a critical level, ending at 25,057.
Tariff Tensions and Tech Weakness Shake Indian Markets as Nifty Nears Make-or-Break Zone
The Indian IT sector faced renewed pressure as TCS’s quarterly miss sent shockwaves through investor sentiment. The Nifty IT index fell over 1%, leading sectoral losses for the day. Global trade uncertainties only compounded the damage, with investors now anticipating potential earnings downgrades in light of narrowing margins and weak global demand.
Midcap and smallcap stocks showed signs of resilience despite the broader market weakness. With relatively better breadth in these segments, retail participation remains intact, particularly in sectors like auto and pharma. However, analysts advise caution due to the rising volatility driven by external shocks and sector-specific underperformance.
Global markets are grappling with the possibility of higher inflation and slower growth due to retaliatory tariffs. While EU and Mexican officials plan further negotiations with the U.S., the aggressive tone from Trump’s camp has already cast doubt on any immediate resolution. Meanwhile, uncertainty over the Fed’s direction—particularly criticism over renovation expenses and leadership—adds another layer of unpredictability.
Eternal Ltd stood out as a bright spot in an otherwise downbeat session. With a price increase of 2.75% and trading volume surging over 100% from its 5-day average, investor interest seems to be picking up. Currently trading 42% above its 52-week low, the stock has caught attention for its relative strength in a weak market, signaling potential bullish sentiment among institutional buyers.
The convergence of global trade tensions, IT sector headwinds, and technical weakness has put Indian markets in a precarious position, with the Nifty 50 at a critical support zone.
As Warren Buffett once said, “Only when the tide goes out do you discover who’s been swimming naked.”
