Trump’s Tariff Tantrum Hits Indian Markets — Can Nifty Bounce Back And Hold It?
Looks like Trump’s back… and so are the tariffs. After the US imposed fresh duties on Indian goods on 31st July 2025, Indian stock markets didn’t take the news lightly. Thursday and Friday saw a clear selloff across the board.
Here’s the damage:
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Nifty 50 dropped from 24,855 to 24,565
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Sensex fell from 81,481 to 80,599
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Bank Nifty slipped from 56,150 to 55,617
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Small-cap and mid-cap indices also took hits
In short, red was the color of the week.
But there’s still a flicker of hope. Nifty 50 is managing to stay above the key 24,500 support level, and some buying activity has started showing up around the 24,600 mark. That’s making some investors wonder — is this just a temporary pullback?
So, what do you think?
Will the markets find their footing and bounce back like they’ve done before?
Or will this tariff move drag things down for a while?
The coming week could be interesting. Are you buying the dip or waiting on the sidelines?
Markets Try To Shake Off The Jitters
Although the Indian stock market has shown a slight recovery today, and the indices are attempting to return to the comforting shade of green, the key question remains: Will the market sustain this bounce, or is it just a temporary blip?
Can the indices hold their ground, or will the green fade again under pressure? Investors are watching closely to see if this recovery has legs or if it’s just a short-lived breather in a volatile phase.
Nifty And Sensex Rebound Slightly
As of early Monday, August 4, 2025, the Nifty 50 is showing some life, up about 0.28% at 24,632.35, thanks to strong performances in auto and metal stocks. The index comfortably crossed the 24,600 mark, hinting at a modest rebound after five tough weeks.
Meanwhile, the BSE Sensex is also nudging up, trading near 80,765 with a 0.21% gain. But hold your horses — analysts warn that 24,500 is a make-or-break support level for Nifty.
The Top Five Explanations Are:
Here are five reasons why the Indian stock market didn’t overreact to Trump’s tariff announcement, according to market experts:
- Trump’s Timing:
The tariff announcement came just before the August 1 deadline, seeming more like a strategic warning than a final move. Ongoing talks with India offer hope for a resolution. - India-US Trade Deal Still On:
American delegates will visit New Delhi on August 25 for trade discussions, signaling room for negotiation and calming investor nerves. - Strong DII Support:
Domestic institutional investors (DIIs) showed confidence by buying ₹6,372 crore on July 31, cushioning the market against external shocks. - Discounted Markets:
The tariff issue has been looming for weeks, so much of the uncertainty is already priced in, reducing market sensitivity. - Growth Theme Intact:
Despite a 25% tariff, sectors like pharma, textiles, autos, and gems will see limited impact. Investors are shifting focus to domestic sectors like banks, FMCG, infrastructure, and EVs, mitigating risks.
Experts Say India’s Economy to Weather Trump’s Tariff with Limited Impact
Experts suggest that while the United States is India’s largest export destination, contributing around 2.2% to the country’s GDP in 2024, the newly imposed 25% tariff is expected to put some pressure on the domestic economy. However, the overall impact is likely to remain limited compared to other emerging markets, as India currently holds a small competitive edge over rivals like China.
The tariff is expected to affect sectors such as engineering, pharmaceuticals, energy, textiles, and jewellery more significantly. Analysts also point to a broader global shift towards “re-globalisation,” where strategic integration, regional trade blocs, and trusted partnerships take center stage.
This shift will lead to greater geographic and sectoral dispersion, creating potential opportunities for supply chain resilience, infrastructure development, and domestic industries supported by favorable policies. Despite initial concerns, the Indian stock market has shown notable resilience, reflecting investor confidence and the market’s ability to absorb external shocks without major disruptions.
(With Inputs From Mint)
Also Read: Inflation Set To Dip: RBI May Revise Target In August MPC Meet
Aishwarya is a journalism graduate with over three years of experience thriving in the buzzing corporate media world. She’s got a knack for decoding business news, tracking the twists and turns of the stock market, covering the masala of the entertainment world, and sometimes her stories come with just the right sprinkle of political commentary. She has worked with several organizations, interned at ZEE and gained professional skills at TV9 and News24, And now is learning and writing at NewsX, she’s no stranger to the newsroom hustle. Her storytelling style is fast-paced, creative, and perfectly tailored to connect with both the platform and its audience. Moto: Approaching every story from the reader’s point of view, backing up her insights with solid facts.
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