How Sensex and Nifty Recovered After Trump’s 25% Tariff Shock
Trump’s surprise 25% tariff on Indian imports shook the stock market, but Sensex and Nifty bounced back. Experts suggest it’s temporary and urge investors to stay calm.
Ellofacts
How Sensex and Nifty Recovered After Trump’s 25% Tariff Shock
US President Donald Trump recently announced a 25% tariff on Indian goods, the highest among Asian nations. The news initially sent shockwaves through the market, with both Sensex and Nifty falling by around 1%. Sectors like textiles, pharmaceuticals, chemicals, and auto components were among the hardest hit.
Why Markets Rebounded Quickly
Despite the harsh announcement, Indian stock markets quickly bounced back. Experts believe the tariff hike is a negotiation tactic and not a permanent policy. With US-India trade talks ongoing and a US delegation set to visit India in August, the tariff could reduce to 15–20% as part of a broader agreement.
What Experts Are Saying
Analysts from top firms like Nomura and Emkay suggest the impact of this tariff will be limited. Since India is working towards a detailed trade deal, these tariffs are seen as an opening move rather than a final settlement. Emkay’s economist Madhavi Arora even stated that India’s earnings growth in the second half of FY26 will likely remain unaffected.
Key Sectors to Focus On
While export-heavy sectors may suffer in the short term, experts advise investors to look toward domestic consumption themes. Sectors such as private banking, telecom, cement, capital goods, and select auto stocks are expected to do well. The depreciation of the rupee may also benefit IT companies by improving export revenues.
Investor Strategy Going Forward
With foreign institutional investors (FIIs) already withdrawing ₹25,000 crore from Indian markets recently, much of the negative sentiment may already be priced in. Investors are encouraged to adopt a 'buy the dip' strategy, especially in sectors that are less affected by tariffs.
Conclusion
Though the 25% tariff shocked the markets initially, the quick recovery of Sensex and Nifty shows investor confidence in a favorable outcome. With trade negotiations continuing, the market outlook remains cautiously optimistic. Long-term investors should stay focused on strong domestic sectors and use short-term corrections as buying opportunities.
