Nifty reclaims 24,600, Sensex shrugs off Trump's 50% tariff threat as Dalal Street recovers

Dalal Street saw a choppy session of trade on August 7.

Benchmark indices Nifty 50 and Sensex staged a smart recovery in the last hour of trade, erasing sharp intraday losses, to eke out minor gains on Thursday, August 7, as possibilities of talks between U.S. and Russia lifted sentiment.

Earlier in the session, the market took a sharp fall as U.S. President Donald Trump announced an additional 25 percent tariff on Indian goods, taking the total tariff rate to 50 percent. Trump's move comes in response to New Delhi’s continued purchases of Russian oil and defence equipment. After the order, the total tariff on Indian goods, barring a small exemption list, will be 50 percent.

At close, the Sensex was up 79.27 points or 0.10 percent at 80,623.26, and the Nifty was up 21.95 points or 0.09 percent at 24,596.15. On the weekly expiry session, the benchmark index Nifty 50 soared one percent from its intraday low of 24,344.15.

Indian sectoral indices saw mixed performance on the day. Nifty Media rose the most, up 1.04 percent, followed by Nifty IT and Nifty Pharma, which gained 0.9 percent and 0.8 percent, respectively. Auto and PSU Bank indices also edged up 0.33 percent each.

On the downside, Nifty Realty and Energy slipped marginally by 0.04 percent and 0.16 percent, while Infra lost 0.21 percent. Dalal Street's broader sentiment remained cautious, with select stocks-specific moves driving the trend.

According to Emkay Global, the direct impact of Trump's tariffs on listed market earnings is limited. "However, a 50 percent tariff will bring Indian exports to the US to a near-complete halt, with secondorder hits on employment-heavy sectors like textiles and jewelry. We see the government

stepping in with fiscal support to these sectors, including protecting banks from potential NPLs."

The brokerage added that India’s high dependence on domestic consumption will avert any catastrophic growth collapse, although we see the need for targeted stimuli to counter such a move. "In the short term, this could trigger a short-term vicious cycle of CAD worries, rupee weakness, FPI selling, and a correction in equities. This, in our view, would be short-lived," added Emkay.

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