India’s benchmark indices, Sensex and Nifty, started the day on a weak note on February 19, as investors grew wary of stretched valuations in local stocks and global trade uncertainties. The Nifty 50 index fell under pressure, weighed down by losses in IT and pharma stocks. The Nifty Pharma index was the hardest hit among sectoral indices, dropping 2 percent after Trump announced plans to impose tariffs on pharmaceutical imports.
However, soon after, the Sensex and Nifty flattened as the broader market rebounded. The BSE Midcap index climbed over 1 percent, while the BSE Smallcap index surged more than 2 percent.
At 10:40 AM, the Sensex was up 299 points or 0.4 percent at 76,266, and the Nifty was up 87 points or 0.4 percent at 23,033. About 2,650 shares advanced, 633 shares declined, and 102 shares were unchanged.
Across Asia, markets traded mixed, reacting to U.S. President Donald Trump’s latest tariff threats. While Asia-Pacific equities mostly declined, Wall Street defied concerns, with the S&P 500 closing at a record high as investors shrugged off worries over tariffs and inflation. In a dramatic finish, all three major U.S. indices rallied seconds before the closing bell.
Trump announced on Tuesday his intention to impose 25 percent tariffs on auto, semiconductor, and pharmaceutical imports, a move that could disrupt international trade and send ripples across global markets.
"The recent announcement by President Trump of 25 percent tariffs on automobiles, pharmaceuticals, and semiconductor chips is likely to dominate market sentiment initially. This is significant for India, as we export around 30 to 40 percent of the U.S.’s pharmaceutical requirements. Naturally, this could be a negative trigger for Indian pharma companies," said Ravi Diyora, Director of Research at Kunvarji Group.
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However, he believes the impact may be short-lived. "The market seems to have already factored in this news, as Trump had previously hinted at reciprocal tariffs. While we may see a knee-jerk reaction, it’s unlikely to be sustained."
Beyond pharma, the impact on Indian automobile exports appears minimal. "While India exports vehicles, major players like Tata Motors ship around 20,000 Jaguar Land Rover (JLR) units to the U.S., but these exports are routed through Europe and the UK, not directly from India. As a result, the tariffs may not significantly affect Tata Motors," Diyora explained.
On semiconductors, India’s exposure remains relatively small. "When it comes to semiconductors, India has limited exposure to U.S. exports, unlike Taiwan, which has a much larger footprint. Interestingly, Taiwan’s markets have not reacted strongly—they remain marginally in the green—indicating muted global panic over this development," pointed out Diyora.
Meanwhile, geopolitical developments took centre stage as Washington and Moscow agreed to hold further talks on ending the war in Ukraine—a shift from the U.S.’s previous hardline stance that aimed to isolate Russian President Vladimir Putin. However, Russia hardened its position, demanding that NATO refrain from granting membership to Ukraine.
Trump, speaking after the 4.5-hour meeting in Saudi Arabia, struck a cautiously optimistic tone, stating he was "more confident" about potential progress and hinting at a possible meeting with Putin before month-end.
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Back home, Dr. Reddy's, Sun Pharma, Cipla, TCS, and M&M led the declines on the Nifty 50, dropping 2-4 percent. On the other hand, Tata Steel, NTPC, BEL, Grasim, and Hero MotoCorp were the top gainers, each rising 1 percent.
According to Sameet Chavan, Head of Technical and Derivative Research at Angel One, a strong support zone is forming at 22,800–22,700, with additional support levels at 22,600–22,500. Immediate resistance lies at 23,250, followed by 23,400.
All eyes are now on the FOMC meeting minutes, set for release later tonight, which could shape market expectations on the U.S. interest rate outlook—a key factor influencing global investor sentiment.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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