Deteriorating market outlook expected due to tariff worries affecting market confidence
The Indian stock market, the Sensex, is bracing for a flat to negative opening today, as uncertainty over potential US tariff actions persists [1]. This global economic slowdown, with forecast GDP growth at 2.4% in 2025, is causing an overall slowdown in economic growth and trade [1][2].
In India, rising US tariffs and global trade tensions have slowed down oil demand growth significantly, a key driver for the Indian economy. The International Energy Agency notes a sharp reduction in India's oil demand growth forecast for 2025, highlighting a broader economic impact [1].
However, India is benefiting from global supply chain diversification trends, potentially boosting investment inflows despite tariff-related uncertainties [3]. This diversification effort is reshaping investment flows and could benefit the Indian market structurally.
The Sensex, while showing resilience so far, has not been immune to the impact of these tariff threats. Yesterday, it dropped 308 points as Trump's tariff threats sparked selling pressure [4]. Heavy profit-booking in oil and gas stocks dragged sectoral indices lower.
Amid this uncertainty, the Reserve Bank of India (RBI) is expected to hold rates steady, but the tone of their commentary will be crucial [5]. The combined technical and derivatives setup suggests that as long as key support levels hold, there is a potential for upward continuation [6].
Ajit Mishra, SVP of Research at Religare Broking Ltd., stated that the uncertainty over tariffs and lack of major positive earnings surprises has been weighing on market sentiment [7]. He advises participants to maintain a stock-specific approach and focus on prudent position sizing.
In the options segment, the highest Call open interest is seen at the 24,800 and 25,000 strikes, signaling key resistance levels. Conversely, the highest Put open interest lies at the 24,600 strike, suggesting it to be an important support zone [8].
Traders are advised to remain cautiously optimistic, use dips to accumulate quality names, and manage risk with appropriate stop-loss strategies [9]. Markets trimmed losses as IndusInd Bank and Titan led recovery [10].
As the focus shifts to the upcoming RBI outcome after most companies have announced their Q1 FY25 results, select stocks across sectors are showing noticeable strength and offering buying opportunities [11]. Despite the challenges, the Indian market continues to present opportunities for those who approach it with caution and a strategic perspective.
[1] [2] [3] [4] [5] [6] [7] [8] [9] [10] [11] - Sources for the article's facts.
- The uncertainty over potential US tariff actions continues to impact the Indian stock market's policy, causing a flat to negative opening.
- The global economic slowdown, with a forecast GDP growth of 2.4% in 2025, has caused an overall slowdown in economic growth and trade.
- Rising US tariffs and global trade tensions have slowed down oil demand growth significantly in India, a key driver for the Indian economy.
- The International Energy Agency notes a sharp reduction in India's oil demand growth forecast for 2025, highlighting a broader economic impact.
- India is benefiting from global supply chain diversification trends, potentially boosting investment inflows despite tariff-related uncertainties.
- Ajit Mishra, SVP of Research at Religare Broking Ltd., states that the uncertainty over tariffs and lack of major positive earnings surprises has been weighing on market sentiment.
- In the options segment, the highest Call open interest is seen at the 24,800 and 25,000 strikes, signaling key resistance levels.
- Conversely, the highest Put open interest lies at the 24,600 strike, suggesting it to be an important support zone.
- Traders are advised to remain cautiously optimistic, use dips to accumulate quality names, and manage risk with appropriate stop-loss strategies.
- Markets trimmed losses as IndusInd Bank and Titan led recovery.
- As the focus shifts to the upcoming RBI outcome after most companies have announced their Q1 FY25 results, select stocks across sectors are showing noticeable strength and offering buying opportunities.
