Terrible Thursday awaits D-Street? What Gift Nifty, experts signal for Indian stock market after Trump's 25% tariff move
The signs of an impending volatile session were already visible, as GIFT Nifty futures saw a sharp decline after Trump slapped higher-than-expected tariffs on India, signalling some stalemate in the ongoing negotiations between the two nations.
Gift Nifty futures plunged sharply to 24,678, and were last trading down 160 points, or 0.63%, at 24,700, signalling a gap-down opening for the Indian stock markets on Thursday.
Analysts had signalled that a rate of 20% or higher would come as a disappointment for India, which had been seeking a better deal than the 19% that Trump offered Indonesia and the Philippines.
Anirudh Garg, Fund Manager at INVasset PMS, said a knee-jerk reaction is quite possible tomorrow — partly due to Trump's 25% tariff announcement, and partly because it coincides with the monthly expiry.
"On expiry days, volatility tends to spike as traders roll over positions and settle futures and options contracts. With Gift Nifty already reacting negatively, we could see that sentiment spill over into domestic markets at the open," Garg added.
Kranthi Bathini, Director - Equity Strategy, WealthMills Securities, refrained from predicting a stock market crash, but did not rule out the possibility of a knee-jerk reaction.
"There could be a knee-jerk reaction in the short term, but the issue with Trump is that he often says one thing today and something completely different tomorrow. What is certain is the uncertain nature of Trump's approach," said Bathini.
Garg added that while the headline shock may drive short-term selling, especially in export-linked sectors like engineering, gems, and textiles, the broader market may soon reassess.
'India's export exposure to the US is significant, but not dominant—about $77.5 billion in 2024. The estimated GDP impact is modest, between $3–8 billion (or ~ ₹ 25,000– ₹ 66,000 crore), translating to a 0.07–0.2% hit. This is not disruptive when set against India's strong domestic demand base, PLI-led capex momentum, and geopolitical tailwinds,' Garg added.
Structurally, markets are likely to stabilise once the dust settles, he said. 'If anything, this may offer opportunities in select names where the long-term thesis remains intact.'
Trump said he would impose a tariff rate of 25% on India starting on August 1 and suggested he would add an additional penalty on the country's energy purchases from Russia.
Trump, in a post on Truth Social today, said India had tariffs that were 'among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country.'
'Also, they have always bought a vast majority of their military equipment from Russia, and are Russia's largest buyer of ENERGY, along with China, at a time when everyone wants Russia to STOP THE KILLING IN UKRAINE, ' he added.
'INDIA WILL THEREFORE BE PAYING A TARIFF OF 25%, PLUS A PENALTY FOR THE ABOVE, STARTING ON AUGUST FIRST.'
Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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