Indian stock market benchmarks, the Nifty 50 and the Sensex, are expected to start on a weak note today, July 31, influenced by mixed global cues, U.S. Federal Reserve policy, and President Trump's imposition of tariffs on Indian goods.

Global Market Cues Asian markets presented a mixed picture. Japan's Nikkei 225 and Topix indices showed gains, while South Korea's Kospi index edged higher and Hong Kong's Hang Seng index futures indicated a weaker opening. U.S. stock markets ended Wednesday's session on a mixed note after the Federal Reserve held interest rates steady.

Gift Nifty The Gift Nifty was trading around the 24,669 to 24,930 level, indicating a gap-down start for the Indian stock market indices. This represents a discount of approximately 5 to 200 points from the Nifty futures' previous close.

Impact of Trump Tariffs President Trump announced a 25% tariff on Indian goods, effective August 1, a move that has the potential to negatively affect Indian equity markets. The tariffs exclude a penalty due to India's energy and defense ties with Russia. Experts suggest that key export-oriented sectors such as textiles, pharmaceuticals, and automotive components are likely to be most impacted, potentially reducing investor interest in the short term. Nilesh Shah, MD at Kotak Mahindra AMC, views the tariff move as a clear negative for the markets. The imposition of tariffs may keep the market mood subdued. The market may remain range-bound, focusing on ongoing earnings. The new tariffs have sent the rupee tumbling, posting its steepest one-day drop since May and hitting a five-month low on Wednesday.

US Fed Policy Impact The US Federal Reserve's decision to hold interest rates steady and Chair Jerome Powell's statement have dampened expectations of a rate cut in the September meeting. Market expectations for a Fed rate cut in September have fallen below 50%. Some experts believe that the Fed policy will not significantly impact the Indian market because a pause is largely discounted, and the Fed may not give clear signals on rate cuts. A dovish stance from the Fed might weaken the U.S. dollar, potentially triggering foreign capital inflow to emerging markets like India. If there is a tariff-induced rise in U.S. inflation, the Fed may delay any further rate cuts or even consider interest rate tightening, which could cause FIIs to withdraw from Indian equities.

Nifty 50 Technical Outlook The Nifty 50 formed a small positive candle on the daily chart with a long upper shadow, indicating a possible hurdle around the 25,000 mark. Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, believes the short-term trend of Nifty continues to be choppy, but the near-term uptrend status remains intact. According to Rupak De, Senior Technical Analyst at LKP Securities, the trend remains positive, with Put writers putting their weight at 24,800. He anticipates that buying on dips might continue until the Nifty decisively falls below 24,700.

Sensex Technical Outlook The Sensex formed a small candle on the daily charts, and the narrow range activity on intraday charts indicates indecisiveness between bulls and bears. According to Mayank Jain, Market Analyst at Share.Market, the next hurdle for Sensex lies in the 82,000 – 82,200 range, with support seen near 80,800 – 80,600.

Trading Strategy Ambala believes that a 'sell-on-the-rise' approach would be beneficial for market participants, with the Nifty index likely to find support around 24,790 and 24,720 levels, and face resistance between 24,920 and 24,980 levels.

Overall Market Sentiment Market participants are likely to focus on upcoming quarterly earnings for cues on corporate performance amidst macroeconomic uncertainties. The unresolved India-US trade deal remains a significant headwind, but better stability in global markets and steady domestic institutional investment may underpin the market.