How Will Indian Stock Market Open Today After Trump's 25% Tariff Jolt?

The Indian stock market awaits a gap-down opening on Thursday, July 31, after US President Donald Trump announced a supersized 25% tariff rate on India for trade. D-Street experts believe the tariff announcement will lead to a sudden 'knee-jerk' reaction and extended volatility in the market.

Benchmarks Sensex and Nifty 50 recently broke out of consolidation and traded rangebound today amid the cautiousness surrounding the India-US trade deal and a slowdown in corporate earnings growth. However, Trump's tariff jolt may trigger certain abrupt positions by investors during tomorrow's market session which also sees the monthly expiry.

Gift Nifty trades around 24,712 level, down nearly 150 points, a discount of nearly 140 points from the Nifty futures’ previous close at 24,860, indicating a muted start for the Indian stock market on July 31. GIFT Nifty operates in two trading sessions. The first session runs from 6:30 a.m. to 3:40 p.m. IST. The second session begins at 4:35 p.m. and continues until 2:45 a.m. the following day.

"The stock market may open tomorrow with a knee-jerk reaction after the latest US tariff announcement of 25%. However, it remains to be seen if the trade deal gets postponed upon negotiations to decide when the tariff will kick in. Going by the recent past, the Trump administration is notorious to be playing its trade tactics, bringing in more twists and turns for trading partners," said Kranthi Bathini, Equity strategist, WealthMills Securities Pvt Ltd.

Earlier, most analysts believed that if the tariff rate would be between 10-15%, the Indian stock market would have 'welcomed' the move. Dr VK Vijaykumar, Chief Investment Strategist, Geojit Investments Ltd told NDTV Profit in an exclusive interview that the market will be 'disappointed' if the tariff rate is above 20%.

On the other hand, leading market expert Ajay Bagga believes the Indian stock market will discount the news "very fast." Bagga further noted that this pattern of behaviour from Trump regarding tariff policy was not unique to India. "This is on expected lines, we should not be humiliated by this, it's okay," he said.

According to Nilesh Shah, managing director of Kotak Mahindra AMC, the market may react 'negatively', following the tarifff announcement. "Despite the unpredictable policy making of US, market was expecting a tariff deal to work out as longer-term US India strategic interests are aligned," Shah said.

The Indian stock market extended their corrective phase for the second consecutive session following the recent steep sell-off. The Nifty 50 opened on a firm note but faced resistance near the 24,900 marks, triggering profit booking that dragged the index to an intraday low of 24,772 during the mid-session.

Selective buying interest was observed in IT and FMCG pockets, with both indices ending marginally in the green, up around 0.3%. Broader market remained muted — the Nifty Midcap 100 ended flat, while the Nifty Small cap 100 slipped by 0.5%, reflecting underlying caution among participants.

Apart from the 25% tariff rate, Trump also said that India will pay a tariff of 25% from Aug. 1 in a post on Truth Social. He also added that India will pay a penalty for its purchases of Russian military equipment and Russian energy. The announcement comes after Trump on Tuesday said that the rate of tariff to be levied against Indian imports had not been finalised yet.

"Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country (sic)," Trump said in his post on Truth Social. In another post on the social media platform, Trump added that US have a massive trade deficit with India.

According to Feroze Azeez, Joint CEO, Anand Rathi Wealth Limited, the announcement of a 25% tariff on Indian goods, while higher than anticipated, broadly falls within the 15–20% range that markets had been bracing for. "In that sense, it is not entirely unexpected," he said.

Experts believe what requires close monitoring is the structure of the penalty linked to arms and energy imports from Russia, which remains undefined at this stage. From a technical standpoint, the move could weigh on near-term export competitiveness and trigger currency volatility if sentiment deteriorates.

"The Indian market is currently being driven largely by domestic investors, and FIIs are almost 85% short. Therefore, a major sell-off is not expected. Some volatility is likely, any dips wil be buying opportunities for investors with even 2-3 year time frames as we have already had a 10 month time correction," said Azeez of Anand Rathi.

Disclaimer: The views and opinions expressed by the investment advisers on NDTV Profit are of their own and not of NDTV Profit. NDTV Profit advises users to consult with their own financial or investment adviser before taking any investment decision.