How will Trump's 25% tariffs affect India's key sectors?
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Mumbai: All sectoral indices, except FMCG and media, closed lower on Thursday as investor sentiment turned sour after US President Donald Trump announced 25% tariffs on India effective on August 1 along with additional non-tariff penalties for buying crude oil from Russia.Some sectors like textiles, automobiles, oil & gas and pharmaceuticals are likely to be more susceptible to the adverse impact of tariff imposition. A look at what's in store for the sectors that are expected to bear the brunt of the tariffs:Textile stocks could remain under pressure as the sector will be among the most impacted by the tariffs given that US is its biggest market."Margins are expected to take a hit till global trade stabilises," said Prerna Jhunjhunwala,VP equity research, textile and retail, Elara Capital. Vardhman Textiles and Kitex Garments tumbled 5% each while Gokaldas Exports dropped 4.5% on Thursday. Indo Count Industries and Welspun Living shed 4% each. "Textiles and gems and jewellery stocks are expected to see the most adverse impact due to their high dependence on the US," said Sunny Agrawal, head of Fundamental Equity Research, SBICAPS Securities.Analysts said there is some ambiguity on the impact of tariffs on the auto sector since it was already subjected to 25% tariffs in the earlier round of tariff imposition."While domestic focused auto companies are not expected to see major impact, companies which have a high exposure to the US markets are likely to witness impact, but the extent of impact is unclear," said Agrawal.The Nifty Auto Index shed as much as 1.5% during the day but erased some of the losses and closed 0.4% lower. Balkrishna Industries fell 2.8% and Bharat Forge declined 2.3%. Exide industries, Samvardhana Motherson International and MRF Ltd closed over 1% lower. Emkay Global said auto is better placed than feared (as India barely exports vehicles to the US, while auto components may eventually benefit from tariffs on China, Canada, and Mexico).The Nifty oil & gas index dropped 1.5% on Thursday with 14 out of 15 stocks on the index ending lower. Mahanagar Gas tumbled 4.1% while Adani Total Gas and Gujarat State Petronet slid 3.4% and 2.8%, respectively."Investors are beginning to build in the impact of supply constraints due to the US sanctions on Russia for crude oil purchases by China and India and the non-tariff penalties for buying crude oil from Russia on India," said Swarnendu Bhushan, co-head - Institutional Research, Prabhudas Lilladher. "This could drive up crude oil prices and result in lower gross marketing margins for oil marketing companies." IOC, Hindustan Petroleum, GAIL India Oil India and Bharat Petroleum Corporation moved between 1.5- 2.5% lower.Nifty Pharma fell 1.3% and Nifty healthcare index dropped 1.1% on Thursday as US is the biggest market for domestic drugmakers. "In absence of overnight alternatives for generic drug makers, US is not likely to impose tariffs on pharma as healthcare cost in US would move up significantly," said Agrawal."Although US has allayed domestic manufacturing, there have been concerns on viability to produce and sell in the US."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
27 minutes ago
- Economic Times
US Stock market: S&P 500 suffers biggest daily fall in over 3 months, Nasdaq Composite, Dow Jones crash
Key indexes of US Stock Market are S&P 500, Dow Jones Industrial Average, and Nasdaq Composite. CBOE Volatility Index, also known as Wall Street's fear gauge, climbed to as much as 21.90, its highest since June 23. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads FAQs U.S. stocks slumped on Friday, with the S&P 500 on track for its biggest daily percentage decline in more than three months as new U.S. tariffs on dozens of trading partners and a surprisingly weak jobs report spurred selling pressure. S&P 500 lost 101.60 points, or 1.60 per cent, to end at 6,237.79 points, while the Nasdaq Composite lost 472.78 points, or 2.24 per cent, to 20,649.67. The Dow Jones Industrial Average fell 543.97 points, or 1.23 per cent, to 43, the S&P 500 and the Nasdaq recorded their biggest single-day percentage declines since April 21 and all three major indexes were on track for weekly losses. The CBOE Volatility Index, also known as Wall Street's fear gauge, climbed to as much as 21.90, its highest since June weighing on equities was a tumble in shares after the company posted quarterly results but failed to meet lofty expectations for its Amazon Web Services cloud computing unit. Just hours before the tariff deadline on Friday, President Donald Trump signed an executive order imposing duties on U.S. imports from countries, including Canada, Brazil, India and Taiwan, in his latest round of levies as countries attempted to seek ways to reach better deals. Further denting confidence in the economic picture, data showed U.S. job growth slowed more than expected in July while the prior month's report was revised sharply lower, indicating the labor market may be starting to report significantly pushed up expectations the Federal Reserve will cut interest rates at its September expectations the Fed will cut rates by at least 25 basis points at its September meeting stood at 80.9%, according to CME's FedWatch Tool, up from 37.7% in the prior data from the Institute for Supply Management showed U.S. manufacturing contracted for a fifth straight month in July and factory employment dropped to the lowest level in five was the biggest drag on the Dow, S&P 500 and Nasdaq and pushed the consumer discretionary index, down nearly 4% as the worst performing of the 11 major S&P 500 sectors. Also reporting earnings was Apple, which fell after it posted a current-quarter revenue forecast well above Wall Street estimates, but CEO Tim Cook warned U.S. tariffs would add $1.1 billion in costs over the briefly extended declines after Trump said he ordered the commissioner of the U.S. Bureau of Labor Statistics, Erika L. McEntarfer, to be fired in the wake of the jobs data. In contrast to the broad declines, Reddit surged after it reported quarterly results that exceeded Street expectations, boosted by an AI-focused advertising strategy and strong user engagement.A1. The CBOE Volatility Index, also known as Wall Street's fear gauge, climbed to as much as 21.90, its highest since June 23.A2. Key indexes of US Stock Market are S&P 500, Dow Jones Industrial Average, and Nasdaq Composite.
Mint
27 minutes ago
- Mint
TSX posts biggest decline since April as US jobs data spooks investors
TSX ends down 0.9% at 27,020.43 For the week, the index declines 1.7% Technology sector falls 2.4% Energy loses 1.9% as oil settles 2.8% lower TORONTO, - Canada's main stock index fell for a third straight day on Friday as investors weighed disappointing U.S. jobs data and an escalation in the U.S. trade war with Canada. The S&P/TSX composite index ended down 239.35 points, or 0.9%, at 27,020.43, extending its pullback from a record closing high on Tuesday. It was the index's sharpest decline since April 10. For the week, the TSX was down 1.7%. "August tends to be one of the worst months for the year and it's setting off to do that once again, as we're seeing some volatility and a quick drop-off with weaker payroll numbers in the U.S. and just some concerns around earnings so far," said Greg Taylor, chief investment officer at PenderFund Capital Management. "A lot of the better companies usually report first in the cycle, and we got that, now we're starting to see some weakness." Wall Street posted steep declines as failed to meet lofty expectations for its Amazon Web Services cloud computing unit and after U.S. jobs data disappointed. U.S. employment growth was weaker than expected in July while the nonfarm payrolls count for the prior two months was revised down by a massive 258,000 jobs, suggesting a sharp deterioration in labor market conditions. Domestic data was also downbeat. Canada's manufacturing sector contracted for a sixth straight month in July as tariffs undercut trade with the United States and spurred firms to reduce inventory as well as staffing levels. U.S. President Donald Trump on Thursday signed an executive order increasing tariffs on Canadian goods to 35% from 25% on all products not covered by the U.S.-Mexico-Canada trade agreement. All ten major sectors on the TSX ended lower, led by a 2.4% decline for technology. Energy lost 1.9% as worries about a possible increase in OPEC oil production weighed on the price of oil. U.S. crude futures settled 2.8% lower at $67.33 a barrel. Heavily weighted financials lost 0.9%. MDA Space Ltd was a bright spot. Its shares jumped 18.4% after the aerospace company was selected as the prime contractor on a project for Echostar.
Time of India
27 minutes ago
- Time of India
US Stock market: S&P 500 suffers biggest daily fall in over 3 months, Nasdaq Composite, Dow Jones crash
Key indexes of US Stock Market are S&P 500, Dow Jones Industrial Average, and Nasdaq Composite. CBOE Volatility Index, also known as Wall Street's fear gauge, climbed to as much as 21.90, its highest since June 23. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads FAQs U.S. stocks slumped on Friday, with the S&P 500 on track for its biggest daily percentage decline in more than three months as new U.S. tariffs on dozens of trading partners and a surprisingly weak jobs report spurred selling pressure. S&P 500 lost 101.60 points, or 1.60 per cent, to end at 6,237.79 points, while the Nasdaq Composite lost 472.78 points, or 2.24 per cent, to 20,649.67. The Dow Jones Industrial Average fell 543.97 points, or 1.23 per cent, to 43, the S&P 500 and the Nasdaq recorded their biggest single-day percentage declines since April 21 and all three major indexes were on track for weekly losses. The CBOE Volatility Index, also known as Wall Street's fear gauge, climbed to as much as 21.90, its highest since June weighing on equities was a tumble in shares after the company posted quarterly results but failed to meet lofty expectations for its Amazon Web Services cloud computing unit. Just hours before the tariff deadline on Friday, President Donald Trump signed an executive order imposing duties on U.S. imports from countries, including Canada, Brazil, India and Taiwan, in his latest round of levies as countries attempted to seek ways to reach better deals. Further denting confidence in the economic picture, data showed U.S. job growth slowed more than expected in July while the prior month's report was revised sharply lower, indicating the labor market may be starting to report significantly pushed up expectations the Federal Reserve will cut interest rates at its September expectations the Fed will cut rates by at least 25 basis points at its September meeting stood at 80.9%, according to CME's FedWatch Tool, up from 37.7% in the prior data from the Institute for Supply Management showed U.S. manufacturing contracted for a fifth straight month in July and factory employment dropped to the lowest level in five was the biggest drag on the Dow, S&P 500 and Nasdaq and pushed the consumer discretionary index, down nearly 4% as the worst performing of the 11 major S&P 500 sectors. Also reporting earnings was Apple, which fell after it posted a current-quarter revenue forecast well above Wall Street estimates, but CEO Tim Cook warned U.S. tariffs would add $1.1 billion in costs over the briefly extended declines after Trump said he ordered the commissioner of the U.S. Bureau of Labor Statistics, Erika L. McEntarfer, to be fired in the wake of the jobs data. In contrast to the broad declines, Reddit surged after it reported quarterly results that exceeded Street expectations, boosted by an AI-focused advertising strategy and strong user engagement.A1. The CBOE Volatility Index, also known as Wall Street's fear gauge, climbed to as much as 21.90, its highest since June 23.A2. Key indexes of US Stock Market are S&P 500, Dow Jones Industrial Average, and Nasdaq Composite.
