logo
Markets trade lower after firm start, fresh foreign fund outflows dent sentiment

Markets trade lower after firm start, fresh foreign fund outflows dent sentiment

MUMBAI: Equity benchmark indices Sensex and Nifty started the day on a firm note on Thursday but later faced selling pressure, with investors remaining in a wait-and-watch mode, as hopes are pinned on a favourable outcome from the US-India trade talks.
Fresh foreign fund outflows also dented investors' sentiment as they preferred staying on the sidelines.
The 30-share BSE Sensex climbed 119.05 points to 82,753.53 in opening trade.
The 50-share NSE Nifty went up by 18.7 points to 25,230.75.However, later the BSE benchmark quoted 71.51 points lower at 82,554.47, and the Nifty traded 30.30 points down at 25,182.55.
From the Sensex firms, Sun Pharma, Tata Motors, Kotak Mahindra Bank, Trent, NTPC and Bharat Electronics were among the gainers.
However, Tech Mahindra declined over 1 per cent after its June quarter earnings failed to cheer investors.
IT services firm Tech Mahindra reported a nearly 34 per cent year-on-year increase in consolidated net profit to Rs 1,140.
6 crore for the quarter ending June 30, 2025, on the back of growth in communications and financial services verticals.
ICICI Bank, Eternal, State Bank of India and Asian Paints were also among the laggards.
"There are no triggers for the market to break out of the consolidation range in which it has been stuck for two months now.
Even an India-US interim trade deal has been discounted by the market, leaving no scope for a sharp rally decisively breaking the range.
One positive and surprise factor that can trigger a rally is a tariff rate much below 20 per cent, say 15 per cent, which the market has not discounted.
So, watch out for developments on the trade and tariff front," VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said.
Results of the IT sector continue to disappoint and, therefore, this can remain a drag on the overall market, he added.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

Dealbreaker from Trump?
Dealbreaker from Trump?

Hindustan Times

time4 minutes ago

  • Hindustan Times

Dealbreaker from Trump?

US President Donald Trump has unilaterally announced an end (to at least the current chapter) of the ongoing Indo-US trade deal negotiations, with the deadline of August 1 looming large. India, Trump said in a post on Truth Social, will face 25% tariffs and a 'penalty' for buying energy from Russia. The details of what this penalty will be have not been spelt out yet. Even if the penalty is more than 1%, India will be facing a higher tariff than what Trump announced on April 2. With the caveat that this may well be just another deal-closing tactic, and that India will be able to talk or buy its way out, what does this entail for the Indian economy and Indo-US relations? The US is India's largest export market. India's goods exports to the US were $87 billion in 2024-25, which is almost 20% of the country's total exports of $437 billion. Given the fact that India faced very little tariffs on its exports to the US, the 25%-plus tariff will hurt. Trade is not the only headwind here. If India is forced to divert its oil imports from Russia to the US or other countries, there could also be an increase in the cost of energy imports. Similarly, being forced to divert defence purchases from Russia is bound to become significantly more expensive. Have the talks stumbled because India was steadfast in protecting its agricultural and dairy markets? Was it because of the US insistence that India diversify energy and defence equipment purchases? Or was it because India would not sweeten the pot, the way Japan and the European Union did, committing billions of dollars of investment in the US? In principle, these are valid reservations. The question is will India be worse off with these tariffs or would some tactical manoeuvring have led to a better outcome? Hopefully, the government will give some details in the ongoing Parliament session. The short-term economic pain, especially on the economic sentiment front — expect a bloodbath in the capital markets on Thursday — notwithstanding, there is a longer-term question to be asked here if the tariffs persist (there is always a chance that they will be scrapped as whimsically as they were announced). What does Trump's abrasive move entail for the future of Indo-US strategic ties? China, which by Trump's own admission is also a big buyer of Russian oil, is being offered a much better deal than India because of the rare-earth supply leverage it has. Where does this leave things such as the Quad — a proposed strategic bloc against China — of which India is a part? There are no easy answers to these questions. But one thing is clear: In Trump's trade lexicon, and with due apologies to Marshall McLuhan, the deal is the art.

US tariffs cloud outlook for Indian exports, trigger growth concerns
US tariffs cloud outlook for Indian exports, trigger growth concerns

Mint

time4 minutes ago

  • Mint

US tariffs cloud outlook for Indian exports, trigger growth concerns

New Delhi: The US' imposition of a 25% tariff on Indian exports starting 1 August has cast a shadow over bilateral trade, creating fresh uncertainty for exporters. In addition, uncertainty over a potential penalty, tied to oil and defence purchases from Russia, may cloud pricing strategies and disrupt supply chain planning, making it harder to estimate landed costs. This was set to weigh on short-term business sentiment, analysts said. "Without clarity on the quantum of the penalty, Indian exporters and the US importers are left with no firm basis to calculate landed costs or assess how the tariff burden can be absorbed," said Ajay Sahai, director general and chief executive officer (CEO) at the Federation of Indian Export Organisations (FIEO). "This ambiguity disrupts supply chain planning and pricing strategies," he added. President Donald Trump, in a post on his Truth Social platform on Wednesday announced that Indian exports to the US will face a 25% tariff starting 1 August, along with additional penalty for buying oil and military equipment from US-sanctioned Russia. He, however, didn't elaborate on the additional tariffs. Citing high Indian tariffs, "obnoxious" non-monetary trade barriers, and New Delhi's continued defence and energy ties with Russia, Trump said the move was necessary to address America's 'massive trade deficit' with India. 'While India is our friend, we have... done relatively little business with them,' he added. The US is not only India's largest trading partner, but also one of the few major economies with which India enjoys a significant trade surplus. India's goods trade surplus with the US rose to $41.18 billion in fiscal year 2025 (FY25), up 16.6% from $35.33 billion a year ago. The increase was driven by an 11.6% rise in exports to $86.51 billion, while imports from the US grew 7.4% to $45.33 billion. In comparison, India's overall goods trade reported a deficit of $282.8 billion in FY25. Some economists flagged the development as a setback for India, noting that rival economies in Southeast Asia face lower duties despite operating in similar segments such as labour-intensive goods and electronics. Under Trump's new tariff regime, Vietnam was initially hit with a 46% duty due to its widening trade surplus with the US, but Trump later clarified that most Vietnamese exports would face tariffs below 20%, while transshipped goods from third countries would attract a 40% levy. Indonesia's proposed 32% tariff was trimmed to 19% by mid-July, and the Philippines' 20% duty was similarly eased to around 19% amid early bilateral talks. "The 25% tariff rate is certainly a negative development as it compares to lower rates for peers such as Vietnam, Indonesia and the Philippines, which compete with India in a similar category of labour-intensive products and electronic goods," said Garima Kapoor, economist and executive vice president at Elara Capital. Kapoor noted that while the exact tariff structure on exempted items like pharmaceuticals and sectors with differential rates—such as iron, steel and autos—remains unclear, any inclusion of pharma under the new regime would be a significant setback for India, given that over 30% of its pharma exports go to the US. However, even amid the turbulence, with talks on a bilateral trade agreement (BTA) gaining traction, the tariff setback could be temporary. "A well-negotiated deal that addresses all aspects of trade, investment and tariff and non-tariff barriers by September-October 2025 is likely to yield long-term benefits rather than a hurried deal," she added. Madan Sabnavis, chief economist at Bank of Baroda, said a 25% tariff, excluding the penalty component, is not very different from April levels, when the tariffs were first announced by Trump, but will still put pressure on Indian exporters. "At this stage, some depreciation may be appropriate to support exports. Overall growth can be affected, and our forecast of 6.4%-6.6% holds even now with the most negative impact leaving to 6.4%," he added. India's GDP growth for FY26 is projected to remain strong, with the Reserve Bank of India (RBI) forecasting 6.5%, slightly down from earlier estimates due to global trade risks. The ministry of finance expects growth at 6.3%-6.8%, supported by structural reforms and stable macro fundamentals. The International Monetary Fund (IMF) recently raised its forecast to 6.4%, citing easing trade tensions and resilient domestic demand. While the outlooks remain optimistic, these institutions flagged external risks as key downsides. Some agencies downgraded India's economic growth forecast for FY26 following rising external challenges. Rating agency ICRA Ltd downgraded India's growth forecast for FY26 to 6.2% from 6.5% last month on the back of external factors impacting the country's growth. The agency's chief economist, Aditi Nayar, said the tariff and penalty imposed by the US on Wednesday is higher than anticipated and is likely to pose further headwind to India's GDP growth. "The extent of the downside will depend on the size of the penalties imposed," she added.

With 25% tariff & threat of Russia sanctions, Trump dashes hope of being India's top partner
With 25% tariff & threat of Russia sanctions, Trump dashes hope of being India's top partner

First Post

time4 minutes ago

  • First Post

With 25% tariff & threat of Russia sanctions, Trump dashes hope of being India's top partner

With 25% tariff and the threat of further penalties over the trade with Russia, President Donald Trump has dashed the hope of many in the country that he would be India's best friend in his second term. The all-round progress in the India-US relationship under the past four years now stands at risk of being undone. read more US President Donald Trump stands, after delivering remarks on tariffs, in the Rose Garden at the White House in Washington, DC, US, April 2, 2025. Reuters With 25 per cent tariff on imports from India amid delay in the much-awaited bilateral trade agreement and the threat of further penalties over Indian imports from Russia, US President Donald Trump has posed a fresh challenge to burgeoning India-US trade ties, effectively creating an environment marked by scepticism and coercion that might undo years of progress in bilateral ties. In a post on Truth Social, Trump on Wednesday announced a two-pronged assault on India. STORY CONTINUES BELOW THIS AD Firstly, he used the trade deficit as a premise to slap 25 per cent tariff on India. Secondly, using the same language as Senator Lindsey Graham who has threatened to hit the Indian economy with a sledgehammer, he blamed India for funding the Russian war on Ukraine and threatened additional penalties. India remains the largest buyer of Russian energy along with China 'at a time when everyone wants Russia to stop the killing in Ukraine' and India will therefore pay a penalty starting August 1, said Trump. At a time when India is facing an ever-growing Pakistan-China nexus, what India needs is a reliable partner in the Washington DC. Instead, with his actions, Trump has compromised decades of bipartisan efforts to improve the bilateral relationship and replace trust with suspicion and grudges. Trump shakes foundations of India-US ties Trump's two-pronged assault on India is the starkest display of his irreverence to the principle of mutuality that has been one of the defining features of the India-US relationship. For decades, India respected US concerns and US presidents respected India's red lines. Apparently, that tradition ended on January 20. In his second term, Trump has crossed every red line that India has maintained for decades: he has meddled in the Kashmir dispute, hyphenated India and Pakistan, sided with the jihadists in India's extended neighbourhood, and imposed tariffs and threatened secondary tariffs over the trade with Russia. ALSO READ — Beyond Pakistan: Trump's open embrace of jihadist forces across Asia a new headache for India Unlike previous American administrations that pursued a mutually-beneficial relationship with India, there now exists a trust deficit in the bilateral relationship under President Trump as he does not care what India —or any other partner for that matter— wants and pursues a 'my way or the highway' approach, says Prof. Swasti Rao, who teaches geopolitics at the Jindal School of International Affairs, Jindal Global University. STORY CONTINUES BELOW THIS AD 'This is why he has ignored all the sensibilities of India whether it is the Kashmir issue, the India-Pakistan conflict, or the issue of agriculture and dairy in trade talks. He has complicated the India-US relationship that had been on an upward trajectory not just bilaterally but also multilaterally — look at the progress with Quad and IMEC in the past few years. Now, instead of taking the relationship forward, the focus will be on containing the fallout,' says Rao, who is also a Non-Resident Fellow at the Paris-based think tank Eastern Circles. Trump takes India on a bumpy ride Under the previous Joe Biden administration, US officials occasionally expressed concerns about India's purchase of Russian oil and touched issues of human rights. More often than not, those were acts of pandering to the domestic base that did little to slow the progress of the bilateral relationship. Biden joined Prime Minister Narendra Modi to turn Quad into the fulcrum to counter China in the Indo-Pacific. He joined hands with India to float the India–Middle East–Europe Economic Corridor (IMEC) as an ambitious connectivity and geostrategic initiative. He brought India closer to Israel and the United Arab Emirates (UAE) under the I2U2 initiative. Bilaterally, the two countries expanded ties in security, intelligence, scientific, and defence industrial domains. STORY CONTINUES BELOW THIS AD While Biden followed the trend set by Barack Obama, George W Bush, and Bill Clinton before him in taking forward the progress in bilateral ties, Trump has threatened to undo that progress by pulling India into a bumpy ride in the upcoming years — and tariffs are just one of the ways. Some of the blame lies with New Delhi as well. 'There has been a misreading of Trump in New Delhi. He was not the one-stop solution that many thought he would be. There is no easy way to manage him,' says Rao, the geopolitical expert at JISA. What's the road ahead for India-US ties? India cannot replicate templates that other countries have followed to handle Trump. India's approach to international relations and standing in the world neither allows it to appease Trump by offering him military bases, natural resources, or the Nobel Prize or Nishan-e-Haidar like Pakistan nor pursue the 'Daddy' approach of Nato chief Mark Rutte. India will have to figure its own template. 'India has been non-confrontational so far and rightly so. The only way to steer the India-US relationship is to not be confrontational, manage President Trump's ego, smoothen any wrinkles in the relations quietly, and stabilise other theatres like Pakistan and China. India, or any country for that matter, cannot manage many crises at once. India will likely need to come up with a lighter version of Mr Rutte's approach where you don't stoop too low but manage his ego just enough to get your interests secured,' says Rao, a consulting editor at The Print. STORY CONTINUES BELOW THIS AD As for the tariffs, Rao says that nothing is certain with President Trump as he can still make a deal and negotiations are ongoing. 'The best-case scenario will be that India gets a trade deal and tariff comes down and India does not get any secondary tariffs or sanctions over the Russian war on Ukraine. The worst-case scenario will be that the 25 per cent tariff continues and India also gets exposed to secondary tariffs or sanctions under the Graham-Blumenthal proposal. In the short term, the focus should be to avoid this,' says Rao.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store