Sensex, Nifty struggle despite Asian gains. Here's why Trump tariff verdict fails to lift mood

The Indian headline indices BSE Sensex and Nifty started Thursday with a gap up but soon slipped lower. This occurred despite strong gains in Asian markets after a U.S. federal court blocked President Donald Trump’s proposal to impose heavy tariffs on imports from nearly all countries.

After hitting the day's high of 24,889, Nifty plunged over 200 points to hit the day's low of 24,677 while the 30-stock Sensex fell to 81,107 following the highs of 81,816 it made in the initial trade.

However, major Asian indices like the Japanese Nikkei surged 711 points or nearly 2% in the intraday trade while Hong Kong's Hang Seng index was up 300 points or 1.3%. China's Shanghai Composite index was higher by 0.70% around 1 pm India time, while South Korea's Kospi also traded 2% higher.


Market experts attributed this lackluster trade to two primary reasons while conceding that the domestic markets are under consolidation with a broader trend towards the positive side.

Here are top factors that are weighing market sentiments:

1. Monthly expiry

Rajesh Palviya, Senior Vice President, Research-Head Technical & Derivatives at Axis Securities, said that the markets have given up their initial gains amid selling pressure because of monthly expiry. He said that markets fell amid call writing and adjustments being made.

He said that the broader trend remains positive and markets will likely gain from the next session. “Index is subdued but action is happening in the mid and smallcap stocks,” he said.

The Nifty Midcap 100 was up 0.30% while the Nifty Smallcap 100 was half-a-percentage point higher.

Echoing a similar sentiment, Nilesh Jain, Head Vice President, Equity Research Technical and Derivatives at Centrum Broking said Indian markets have been under consolidation for the past 2-3 sessions. He said that monthly expiry is the reason behind today’s lackluster trade and the long term trend remains positive.

1. Tariff impact

Amid ongoing trade negotiations between India and the U.S., the impact of a Federal court blocking Trump’s tariff decisions will have a limited impact on India, two experts said.

"India was comparatively less impacted than its Asian peers from the outset, as the higher tariff rates were primarily imposed on other countries. Furthermore, news of favorable trade discussions between the U.S. and India helped ease concerns about a significant impact on Indian exports to the U.S. These factors may explain why Indian markets have not shown any major reaction to the recent U.S. court ruling on tariffs," Ajit Mishra, Senior Vice President - Research at Religare Broking said.

The Indian markets are in a consolidation phase, said Aamar Deo Singh, Senior Vice President-Equity, Commodity & Currency at Angel One opining that the U.S. federal court’s decision will have a limited impact on India.

“We still have to set-up manufacturing capabilities to first come to the level where we become large exporters,” he added.

Sectoral winner

The metal sector held its ground firmly on the D-Street, with the Nifty Metal index jumping by 1.5%. Barring APL Apollo Tubes, the other 14 stocks were trading in the green, jumping up to 10%. Lloyds Metals And Energy, Jindal Stainless, Hindustan Zinc, Jindal Steel & Power, Tata Steel, NMDC, Hindustan Copper, Steel Authority of India (SAIL), JSW Steel, Adani Enterprises, National Aluminium Company (NALCO) and Hindalco Industries were up between 3% and 0.12%.

Welspun was the top gainer, jumping by 10% in the day’s trade. The company had announced its earnings on Wednesday where the company reported 143% surge in its Q4FY25 net profit.

SAIL, too, reported its earnings on Wednesday, reporting an 11% growth in its Q4 PAT.

Court verdict

A three-judge panel of the US Court of International Trade ruled that Trump overstepped his authority when he invoked the 1977 International Emergency Economic Powers Act to declare a national emergency and justify the sweeping tariffs.

The tariffs overturned decades of US trade policy, disrupted global commerce, rattled financial markets and raised the risk of higher prices and recession in the United States and around the world.

Also Read: Turnaround stocks: IFCI, Shree Renuka Sugars among six BSE 500 stocks to swing to profit in Q4

(Inputs from Agencies)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)