Trump’s tariff war returns to test India’s weakened economy, sending the Nifty 50 lower and the rupee to multi-month lows as export sectors brace for impact.
The rupee weakened past 86 per dollar for the first time in months as tariff fears triggered capital outflows from Indian equities. The pair broke above its 200-day moving average, reinforcing the bearish rupee trend.
The pair faces resistance at 86.50, with a break above likely opening the door to 87.00. Support now sits at 85.80.
The RBI may intervene in spot and forward markets to curb excessive volatility, but sustained tariff pressures could limit its effectiveness.
Tata Motors declined 3% on concerns that auto tariffs could hit its exports to the US, which are a growing part of its Jaguar Land Rover business. The stock underperformed the broader market with heavy selling pressure.
US sales account for about 15% of Jaguar Land Rover’s volume. Tariffs would raise prices and could significantly dent demand.
Given the direct tariff hit to its luxury car unit, near-term downside risk is high. Holding with a stop at INR 500 may be prudent until clarity emerges.
Infosys shares dropped 2.5% as the IT sector faces potential tariff-related slowdown in US demand, given its heavy reliance on American clients. The stock broke below its 50-day moving average with above-average volume.
Infosys derives over 60% of revenue from the US. Tariffs on IT services would directly squeeze margins and reduce contract pipelines.
Short-term pain may create longer-term value, but the uncertainty around tariffs makes near-term entry risky. Watch for support at INR 1,400.
The Nifty 50 fell 1.2% after Trump’s tariff threats raised fears of an earnings slowdown for export-facing sectors like IT and pharma. The index breached its 50-day moving average as foreign investors pulled capital.
The Nifty faces near-term downside as export sectors are likely to underperform. A break below 18,000 could accelerate selling toward 17,500 if the trade dispute escalates.
IT services, automobiles, and pharmaceuticals are most exposed due to their high reliance on US revenue. These sectors sold off sharply on the tariff news.
Gold rallied 0.8% as the tariff war stoked safe-haven demand. The metal broke above the $2,400 level, with traders pricing in further geopolitical risk premium.
If tensions persist, gold could test the $2,450 resistance level, with a push toward $2,500 possible if risk aversion intensifies.
Given the heightened uncertainty, gold offers a hedge, but prices are already elevated. A pullback to $2,350 would offer a better risk-reward entry.
The dollar index rose 0.3% as the tariff war boosted demand for the greenback as a safe haven. The DXY tested the 105.50 resistance level, with US economic resilience adding support.
Tariffs are seen as initially dollar-positive due to safe-haven demand, but prolonged trade wars could hurt US growth and eventually weaken the dollar.
Resistance sits at 105.50, with 106.00 as the next hurdle. Support is at 104.80.
Trump’s renewed tariff threats hit India as the economy weakens, dragging the Nifty 50 down 1.2% and pushing the rupee past 86 per dollar. Export-heavy stocks like Infosys and Tata Motors dropped sharply on fears of US demand slowdown. Gold rallied on safe-haven flows while the dollar index edged higher, adding pressure to emerging markets.
Trump announced plans to impose new tariffs on Indian exports, citing trade imbalances and previous grievances, reigniting fears of a broader trade conflict.
India’s economy is already slowing, with weak domestic demand and high reliance on exports to the US, especially in IT services and automobiles, making it sensitive to trade disruptions.
The Nifty 50 and rupee fell sharply, while export-heavy stocks like Infosys and Tata Motors dropped. Gold and the dollar gained as investors moved into safe havens.