Global Cues
Former U.S. President Donald Trump has imposed an additional 25% tariff on Indian exports, raising the total levy to 50%—among the highest globally. Trump has also warned that “more sanctions are coming.”
Despite this, early morning cues from Gift Nifty remain stable, showing only a mild decline of ~50 points.
Macro Context
The broader economic impact of these tariffs on India may be limited:
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India’s merchandise exports to the U.S. stood at $87.4 billion last year (~2% of India’s GDP).
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The U.S. accounts for only ~18% of India’s total merchandise exports.
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India’s trade deficit with the U.S. is less than 4% of the U.S.’s global trade deficit.
These numbers suggest that while the headline risk is high, the structural economic damage is likely contained.
Market Technicals
The Nifty index continues to respect the support zone between 24,500 and 24,550, as evident from recent price action:
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Aug 1: 24,535
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Aug 4: 24,554
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Aug 5: 24,590
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Aug 6: 24,539
Today is the weekly expiry, which may see increased volatility and short-covering activity if downside momentum fades.
FII Activity
Foreign Institutional Investors (FIIs) remain aggressively short on index futures:
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Index Longs: 8.6%
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Index Shorts: 91.4%
In the last two sessions:
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FIIs have added 1.1 lakh short call contracts, nearly 3 times the short put positions.
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The Put-Call Ratio (PCR) stands at 0.74, nearing oversold levels.
A lack of follow-through on the downside could trigger a rebound toward 25,800–25,850, the nearest congestion zone.
Sectoral View
Domestic-facing sectors may outperform in the near term, as global trade tensions rise:
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Banks and Financials
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Consumer Staples & Discretionary
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Domestic Auto Manufacturers
Stocks in Focus
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Titan, GCPL, Biocon – Scheduled to report earnings today.
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Eternal Group: Ant Financial to offload its entire 1.95% stake (~₹5,300 Cr).
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Hero MotoCorp: Revenue down 6%, EBITDA down 5% YoY.
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Trent: EBITDA up 38%, margin expansion above expectations.
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Insurance Stocks: Likely in focus ahead of monthly premium data release.
Outlook:
Despite headline pressure from global tariffs, the market structure remains resilient. Key support zones are intact, and short-heavy FII positioning suggests the potential for a sharp reversal if downside momentum stalls. Keep an eye on expiry day dynamics and domestic sectors for potential leadership.