The shares of IT, metal and realty companies tumbled in morning trade on July 31 as Trump’s tariffs and penalty on India, along with the outcome of US Federal Reserve’s FOMC meeting weighed on Indian stock markets.
While the sectoral indices were down more than 1 percent each, benchmark indices were down around 0.6 percent each. Sensex was down 460 points to hover around 81,022, while Nifty dropped 141 points to stand at 24,714.
US President Donald Trump on July 30 announced 25 percent tariffs and an additional penalty against India ahead of the August 1 deadline. In a post on Truth Social, Trump described India as America's "friend" but added that it will face 25 percent tariffs plus a penalty for buying Russian military equipment and oil. The US President reiterated that India has among the "highest tariffs in the world".
The US Federal Reserve's Federal Open Market Committee (FOMC) decided to keep interest rates unchanged at 4.25 percent to 4.5 percent in the July 29-30 meeting.
Nifty IT:
The index dropped 1 percent to hover around 35,161 in the morning. The index has now snapped a two-day gaining streak.
Coforge and Wipro shares were the top losers on the index, dropping nearly 2 percent each. Infosys, Mphasis and Tata Consultancy Services (TCS) shares fell over 1 percent each, while Persistent Systems, Tech Mahindra and HCL Tech were down with marginal losses.
The stocks in the sector have seen strong downturn recently, after heavyweight TCS announced significant layoffs, which in turn raised concerns over the broader industry.
"IT stocks remain under pressure, and justifiably so. The recent wave of layoffs and hiring freezes points to a demand environment that’s yet to normalize. While some anticipate a second-half recovery, the runway appears longer than previously expected. Budget cuts and delayed decision-making by global clients continue to weigh on sentiment. The space may need more time before a sustained uptrend materializes," said Bhavik Joshi Business Head, INVasset PMS.
Nifty Metal
Nifty Metal index dropped nearly 1 percent to hover around 9,331. The index has now extended losses for the second consecutive session.
Hindustan Copper was the top loser on the index, falling more that 4 percent to trade at Rs 247 apiece. Adani Enterprises shares followed, dropped nearly 1.5 percent. The Adani Group company is set to release its results for the first quarter of the financial year 2026 today.
NMDC, Jindal Steel and Power, Hindustan Zinc and Welspun Corp shares dropped more that 1 percent, while Vedanta, Hindalco, Tata Steel, Jindal Stainless Steel, SAIL and NALCO shares were trading in the red with marginal losses.
"Metals are bearing the brunt of tariff anxiety, but they’ve also corrected sharply in recent months. With global stimulus chatter rising and inventories low, this may be a setup for a reversion play once dust settles," Joshi said.
Nifty Realty
Nifty Realty dropped more than 1 percent to hover around 907. The index has now extended losses to the second consecutive session.
Sobha shares were the top loser on the index, dropping more than 2 percent. Oberoi Realty, Phoenix Mills and Raymond shares followed, tumbling nearly 2 percent each.
Prestige Estates and Anant Raj shares fell more than 1 percent each, while DLF and Brigade Enterprises shares were down in the red with marginal losses.
Analyst Bhavik Joshi however holds an optimistic view for the sector. "Real estate is quietly gaining strength. Institutional buying, robust pre-sales, and rising rental yields suggest that premium residential and commercial spaces are seeing genuine demand—not just speculative froth. This trend often leads the broader cycle," he said.
Here's what analysts say:
"Given the current landscape of heightened volatility and mixed technical signals, traders are advised to adopt a cautious "sell-on-rise" strategy, particularly when operating with leverage. Booking partial profits on rallies and employing tight trailing stop-losses is essential to manage risk. Fresh long positions should only be initiated if the Nifty sustains above the 25,000 mark. While the broader market undertone remains cautiously bullish, it is crucial to monitor key technical levels and global developments closely," said Hardik Matalia, Derivative Analyst - Research at Choice Equity Broking Private Limited.
However, recent progress in trade negotiations suggests a constructive path forward, and the trade deal between India and US will eventually follow provided both nations show the necessary political will, said Utsav Verma, Head of Research - Institutional Equities, Choice Broking.
"Many investors expect the tariff rate to eventually settle around 15%, paving the way for renewed confidence and stronger trade ties. In the short term, market will try to shed off its complacency. We do not expect huge knee-jerk reaction but a rangebound market focused on ongoing earnings," he said.
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Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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