Indian stocks may face yet another volatile week as Trump tariff concerns loom
The cautious sentiment follows a sixth straight week of declines for benchmark indices, with both the Sensex and Nifty ending lower on persistent selling pressure and profit booking, analysts said.
During the week ended Friday, the BSE Sensex dropped 1.01 per cent to close at 79,857.79, while the NSE Nifty shed 1.20 per cent to settle at 24,363.30.
Market mood turned negative after the US President Donald Trump announced a total 50 per cent tariff on Indian goods, a move that unsettled investors and particularly export-focused sectors.
"The dominant driver of the week's decline was the sudden escalation in US tariffs," said Ajit Mishra, Senior Vice President - Research at Religare Broking Ltd. "Near-term market direction will be shaped by clarity on US tariff implementation, India's diplomatic response, and incoming inflation readings."
Foreign institutional investors (FIIs) were net sellers during the week, with the most pronounced selling seen in pharma and IT stocks that have large US market exposure, Mishra said.
"The Indian equity market exhibited downward movement, closing at a three-month low amid growing concerns over the impact of U.S. tariffs on Indian exports," noted Vinod Nair, Head of Research at Geojit Financial Services.
The Reserve Bank of India's decision to keep the policy repo rate unchanged at 5.50% with a neutral stance did little to improve sentiment.
In the coming week, investors will focus on India's Consumer Price Index (CPI) and Wholesale Price Index (WPI) inflation data. Global developments, especially in US-India trade talks, will also be closely monitored.
The earnings season is drawing to a close, but key results from Ashok Leyland, ONGC, IOC, Hindalco Industries, and BPCL are expected to trigger stock-specific moves.
Siddhartha Khemka, Head of Research - Wealth Management at Motilal Oswal Financial Services, said, "Overall, we expect equities to remain in consolidation mode until there is clarity on the tariff front. In this volatile environment, investors may focus on domestic-oriented themes, while traders are advised to keep positions light." (ANI)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
&w=3840&q=100)
Business Standard
13 minutes ago
- Business Standard
Trump opens door to sales of version of Nvidia's next-gen AI chips in China
US President Donald Trump on Monday suggested he might allow Nvidia to sell a scaled-down version of its next-generation advanced GPU chip in China, despite deep-seated fears in Washington that China could harness American artificial intelligence capabilities to supercharge its military. Trump also confirmed and defended an agreement calling for US AI chip giant Nvidia, led by Jensen Huang, and Advanced Micro Devices to give the US government 15 per cent of revenue from sales of some advanced computer chips in China, after his administration greenlit exports to China of less advanced AI chips known as the H20 last month. "Jensen also has the new chip, the Blackwell. A somewhat enhanced-in-a-negative-way Blackwell. In other words, take 30 per cent to 50 per cent off of it," Trump told reporters in an apparent reference to slashing the chip's capability. "I think he's coming to see me again about that, but that will be an unenhanced version of the big one," he added. Trump's administration halted sales of Nvidia's H20 chips to China in April, but the company said last month it had won clearance to resume shipments and hoped to start deliveries soon. "The H20 is obsolete," Trump said, saying China already had it. "So I said, 'Listen, I want 20 per cent if I'm going to approve this for you, for the country'," he added. The deal is extremely rare for the US and marks Trump's latest intervention in corporate decision-making, after pressuring executives to invest in American manufacturing and demanding new Intel CEO Lip-Bu Tan resign over ties to Chinese companies. Analysts said the levy may hit margins at the chipmakers and set a precedent for Washington to tax critical US exports, potentially extending beyond semiconductors. The US Commerce Department has started issuing licenses for the sale of H20 chips to China, another US official said on Friday. Both the US officials declined to be named because details have not been made public. The China curbs are expected to cost Nvidia and AMD billions of dollars in revenue, and successive US administrations have sought in recent years to limit Beijing's access to cutting-edge chips that could bolster China's military. Washington does not feel the sale of H20 and equivalent chips compromises national security, said the first US official. The official did not know when or how the agreement with the chip companies would be implemented, but said the administration would be in compliance with the law. The US Constitution prohibits Congress from laying taxes and duties on articles exported from any state. The Export Clause applies to taxes and duties, not user fees. When asked if Nvidia had agreed to pay 15 per cent of revenues to the US, a company spokesperson said: "We follow rules the US government sets for our participation in worldwide markets." "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," the spokesperson added. A spokesperson for AMD said the US approved its applications to export some AI processors to China, but did not directly address the revenue-sharing agreement and said the company's business adheres to all US export controls. The Commerce Department did not immediately comment. China's foreign ministry said the country has repeatedly stated its position on US chip exports. The ministry has previously accused Washington of using technology and trade measures to "maliciously contain and suppress China." The Financial Times, which first reported the development, said the chip firms agreed to the arrangement as a condition for obtaining the export licenses for their semiconductors, including AMD's MI308 chips. It added that the Trump administration had yet to determine how to use the money. "The Chinese market is significant for both these companies so even if they have to give up a bit of the money, they would otherwise make it look like a logical move on paper," AJ Bell investment director Russ Mould said. 'SLIPPERY SLOPE' Still, analysts and experts questioned the logic of resuming sales if the chips could pose a national security risk. "Decisions on export licenses should be determined by national security considerations and the tradeoffs of US policy goals, not a revenue-creating possibility," said Martin Chorzempa, senior fellow at the Peterson Institute for International Economics, an independent research institution. "What it ends up creating is an incentive to control things, to then extract a payment, rather than controlling things because we're actually concerned about the risk to national security." US Commerce Secretary Howard Lutnick said last month the planned resumption of sales of the AI chips was part of US negotiations with China to get rare earths and described the H20 as Nvidia's "fourth-best chip" in an interview with CNBC. He said it was in US interests for Chinese firms to use American technology, even if the most advanced chips remained barred, to keep them on a US "tech stack". Some elements of Trump's trade policy are already facing legal scrutiny, with a federal appeals panel skeptical of his claim that a 1977 law, traditionally used to sanction enemies or freeze assets, also empowered him to impose tariffs. "We aren't sure we like the precedent this sets," Bernstein analysts said of the revenue-share deal. "Will it stop with Chinese AI? Will it stop with controlled products? Will other companies be required to pay to sell into the region?" "It feels like a slippery slope to us." The analysts estimated the deal would cut gross margins on the China-bound processors by 5 to 15 percentage points, shaving about a point from Nvidia and AMD's overall margins. Nvidia generated $17 billion in revenue from China in the fiscal year ending January 26, representing 13 per cent of total sales. AMD reported $6.2 billion in China revenue for 2024, accounting for 24 per cent of total revenue. Nvidia has warned a China sales halt for H20 chips could cut $8 billion from July quarter revenue, while AMD has projected a $1.5 billion annual hit from the curbs.
Time of India
17 minutes ago
- Time of India
Export outreach widened to 50 countries to negate US tariff hit
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel India is expanding its export outreach to 50 countries including in West Asia and Africa to reduce reliance on any single market and mitigate the risks of trade disruptions amid the steep 50% tariffs imposed by the 50 countries account for about 90% of India's exports. The ministry of commerce and industry is working product by product to improve India's exports competitiveness, officials said."The idea is to tap top 50 countries and look at each product and the competitors. India must mitigate risks to improve manufacturing and export competitiveness," said an official. This exercise to explore alternative markets is being done with export promotion bodies and is crucial as India's merchandise exports in June were flat at $35.14 week, the US doubled the tariffs on its imports from India to 50% at par with Brazil and the highest on any country in a move marking an escalation of trade tensions between the two the initial 25% duty came into effect last week, the additional 25% is effective August 27. Sectors such as marine products, textiles, leather, gems and jewellery, are expected to be severely hit by the adds to the concern is that competing manufacturing hubs such as Turkey, Vietnam and Thailand face significantly lower tariffs of 15%, 20% and 19% respectively, making Indian products relatively less competitive in the US market."The Indian gem and jewellery sector, in particular, stands to be severely impacted. The US is our single largest market, accounting for over $10 billion in exports-nearly 30% of our industry's total global trade. A blanket tariff of this magnitude is severely devastating for the sector," said Kirit Bhansali, chairman, GJEPCThe government is also working on a strategy to safeguard India's exports from American tariffs. This includes offering tailor-made schemes under the proposed Export Promotion Mission for the affected sectors, diversion of goods to other geographies, and identifying products with less export orders that could be diverted to meet the domestic government was already focusing on 20 countries to increase exports but now 30 more have been included in the also said that the possibility of trade rerouting through low-tariff destinations such as Mexico, Canada, Turkey, UAE, or Oman-undermining the spirit of legitimate trade and impacting transparency, is another concern.
Economic Times
41 minutes ago
- Economic Times
Gold will not be tariffed, says Trump amid chaos that shook the bullion markets
Synopsis Donald Trump has announced that gold imports will not face additional tariffs. This statement comes after confusion arose regarding recent duty hikes. US customs authorities had suggested certain gold bars might be subject to duties. The initial letter caused concerns about potential disruptions to global gold trade. Trump clarified his stance on Truth Social, stating gold will not be tariffed. PTI US President Donald Trump said Monday that gold imports will not face additional tariffs, days after confusion flared on whether his recent duty hikes applied to certain gold bars, threatening to upend global trade of the precious metal."Gold will not be Tariffed!" Trump said on his Truth Social platform, without providing further details. Last week, US customs authorities issued a letter saying that gold bars at two standard weights -- one kilogram and 100 ounces (2.8 kilos) -- should be classified as subject to duties.
