Stock market: Will Sensex, Nifty fall as Trump warns of more tariffs? Key levels to watch

Benchmark stock indices Sensex and Nifty are in focus on Tuesday amid a broader positive momentum in Asia after the US President Donald Trump warned India that he would substantially raise the tariff imposed on the country, attracting a sharp response from India, diminishing chances of any near-term US-India trade deal. Trump’s latest remarks come a week after he announced a 25 per cent tariff on India, citing New Delhi’s “high tariffs on US goods” and its imports of Russian oil and arms.

“With a series of proclamations, US president Trump has called time on trade negotiations for now. Tariffs, from 10 per cent on the UK to 25 per cent on India, form only one plank of Trump’s international economic agenda. Countries have also pledged investments and energy purchases  worth hundreds of billions in the US. With these announcements, economic uncertainty has eased. But it is still very high by historical standards, and we think the stability of the agreements announced so far is highly questionable,” DBS Bank’s Taimur Baig said in a note. 

India has hit back at US President Donald Trump’s threat of additional tariffs, calling the move “unjustified and unreasonable and highlighting that both the US and Europe continue to import Russian goods.

Dismissing Trump’s claim that India profits by reselling Russian oil, the Ministry of External Affairs said it began sourcing from Russia only after traditional suppliers redirected shipments to Europe following the Ukraine conflict.

DBS Bank said the original rationale for the tariffs was around trade, the argument being countries running large goods trade imbalances vis-à-vis the US must be doing so due to unbalanced trade policies. The second element is the use of tariff threat to cajole nations to all sorts of non-economic concessions.

“His recent salvo has been on India, threatening an unspecified penalty for importing oil from Russia. The fact that nations have blinked in most cases, taking US impositions without retaliating, will only embolden Trump to keep using tariffs as a weapon,” Baig said.

As far as the stock market goes, Sensex and NIfty could see a subdued to weak opening in view of the lacklustre trend seen in Gift Nifty index, but optimism in other Asian gauges may aid intra-day recovery in local shares.

“With a fresh threat by the US government to substantially raise tariffs on India over import of Russian oil, domestic markets may continue to witness bouts of intra-day volatility amid nervousness amongst investors,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities.

Sensex, Nifty levels to watch
For Sensex, SBI Securities said the zone of 81,400-81,500 will act as an immediate hurdle for the 30-pack index. While on the downside, the zone of 80,600-80,500 will act as crucial support. ” The 81,500 strike has significant call open interest, followed by the 82,000 strike. On the put side, 81,000 has a substantial open interest, followed by an 80,500 strike,” the brokerage said. 

For Nifty, this brokerage said the zone of 24,550-24,500 will act as important support for the 50-pack index. 

“Any sustainable move below the 24,500 level will lead to further selling pressure. In that case, the index is likely to test the 24,350 level. While on the upside, the zone of 24,800-24,830 will act as an important hurdle for the index,” it said.