US President Donald Trump’s announcement of 25% tariff on India shook the Indian stock market on Thursday morning. The Sensex and Nifty initially saw a decline of about 1%. But surprisingly, in a short time the market took over itself and started compensating for the loss. The Sensex broke 814 points to a level of 80,695, while the Nifty fell to 24,635. However, soon purchases from investors increased and recovery started appearing in the market. Analysts believe that this tariff is not permanent and it may be soft in the coming time.
Trump’s biggest target on India
The 25% tariff imposed by Trump is considered to be the strict in Asia. Vietnam has 20%, Indonesia and Philippines have 19% tariffs, while India has suffered the biggest injury. Apart from this, the Trump administration has also spoken about additional penalty regarding relations with Russia. However, according to experts, this decision will not last long. India and America are going to have a trade talks at the end of August and there is a possibility that the tariff will be softened.
Which sectors affected?
This tariff has a direct impact on auto parts, pharma, refinery, textile, solar, chemical and some manufacturing companies. But the big thing is that financial, technology and domestic consumption -based companies had no significant impact. Analysts say that this decline should be considered a chance to shop. Especially investing in banking, telecom, capital goods, cement, hotel and auto sector companies, which have performed well in the first quarter.
FII’s trust stagger
In the last eight days, foreign investors (FII) have withdrawn around Rs 25,000 crore from the Indian market. This has created pressure in the market, but long -term investors have still not lost trust. Experts believe that the fall of the rupee can benefit the IT sector and he can perform better later. Brokerage firms also believe that the current tariff can be the worst scenario and the final agreement may be fixed at a lower rate.
What is the opinion of big brokerage companies?
Sonal Verma of Nomura said that India has seriously considered every aspect of the trade agreement and did not take any step in haste. The US delegation will come to India at the end of August, till then it would not be right to be considered as permanent tariffs.
VK Vijaykumar of Geojit believes that it is part of Trump’s strategy so that a better deal can be given from India. The Nifty is less likely to go below 24,500. Investors focus on sectors associated with domestic consumption.
According to Madhavi Arora of Emkay, this tariff will not affect India’s second half earnings. Rather, this fall is a chance to enter the market, especially for consumer and industrial companies.
The chance is also hidden with fear
Trump’s tariff caused the initial shock to India, but what the market has returned rapidly gives hope. Now everyone’s eyes are on the Indo-US trade talks of August. Till then, the most important advice for investors is not to panic, but be cautious.
Disclaimer: This article is only for information and should not be considered as an investment advice in any way. TV9 India suggests its readers and spectators to consult their financial advisors before taking any decision related to money.