The Indian stock market is currently facing a complex situation, influenced by a combination of domestic and international factors. Recent trade developments between India and the United States, coupled with existing tariffs imposed by the U.S. and the Reserve Bank of India's (RBI) upcoming policy decision, are expected to be major drivers of market sentiment in the coming days.
Nifty 50 Trade Setup
The Nifty 50 index closed at 24,654.70, down by 0.95%, exhibiting a lower top formation that suggests potential for further decline. Technical analysis indicates that the short-term market trend is weak, but temporary oversold conditions could lead to a pullback rally. For traders, 24,800 is a key level to watch, and staying below this level may continue the correction wave. The market could retest the 24,500 level on the downside. A break below 24,500 might lead to a further decline towards 24,400 (the 200-day EMA) and potentially 24,180. Immediate resistance is expected at 24,750, then at 24,880, and finally at 25,000.
India-US Trade Dynamics
India and the U.S. are continuing negotiations for an early conclusion to a bilateral trade agreement. These discussions occur amidst existing trade tensions, including tariffs imposed by the U.S. on Indian goods. A delegation led by Commerce and Industry Minister Piyush Goyal recently visited the U.S. to discuss potential contours of the deal. Both sides have agreed to continue engagements to expedite the process and achieve a mutually beneficial outcome.
However, there are sticking points in the negotiations. The U.S. is pushing India to purchase American soybeans and corn, but India has reservations about genetically modified (GM) varieties. India is also seeking the removal of "penalty" tariffs on Russian oil imports.
Trump Tariffs
U.S. President Donald Trump has imposed a series of tariffs on Indian imports. These include tariffs of up to 50% on all goods imported from India, in addition to a pre-existing 10% baseline import duty. Furthermore, Trump announced tariffs of up to 100% on imports of branded and patented pharmaceutical drugs, starting October 1, 2025. This move could significantly impact India's pharmaceutical sector, which is heavily reliant on trade with the U.S.. However, the 100% tariff does not apply to generic medicines.
Stocks to Buy or Sell
Given the current market conditions, here are some stocks that analysts are recommending to buy:
- Larsen & Toubro Ltd:The stock is looking attractive for a buy in cash at ₹3,729 with a stop-loss at ₹3,600 and a near-term target of ₹4,000.
- Samvardhana Motherson: Buy at ₹105, Target ₹113, Stop Loss ₹102.
- ITC: If ITC share sustains above ₹410 to ₹415, it could pave the way for a rally towards 430.
- Bank of Baroda: Recommended to buy with a target price of ₹262 | 265.
- SBI Cards & Payment Services Ltd: Recommended to buy with a target price of ₹925.
- CCL Products (India) Ltd: Recommended to buy with a target price of ₹960.
- Hindalco Industries Ltd: Recommended to buy with a target price of ₹790.
- Sun Pharmaceutical Industries Ltd: Recommended to buy with a target price of ₹1775.
Other factors influencing the market
- RBI Policy: The Reserve Bank of India's policy decision is expected to steer market sentiment.
- FII Flows: Foreign portfolio investor flows remain a key determinant for market trends. FIIs have been net sellers of Indian equities recently.
- Rupee Weakness: The Indian rupee has been trading flat, and the ongoing delay in the India-US trade deal talks has added further uncertainty.
- Global Cues: Global developments, including U.S. macro data, dollar index movement, and crude oil prices, will also shape near-term direction.
Disclaimer: It is important to note that the stock market is subject to market risks. Investment decisions should be based on personal research and consultation with a financial advisor.
