The Indian stock market is expected to open cautiously on August 5, 2025, following U.S. President Donald Trump's threat of higher tariffs. Despite positive global market cues, investors are wary of the potential impact of these tariffs on the Indian economy.
Global Market Overview
Asian markets traded higher on Tuesday, mirroring an overnight rally on Wall Street. Japan's Nikkei 225 gained 0.42%, while the Topix rose 0.45%. South Korea's Kospi rallied 1.76%, and the Kosdaq surged 1.83%. However, Hong Kong's Hang Seng Index futures indicated a weaker opening. On Monday, the US stock market ended higher, with the Dow Jones Industrial Average rallying 1.34%, the S&P 500 gaining 1.47%, and the Nasdaq Composite closing 1.95% higher.
Indian Market Performance
On Monday, the Indian stock market closed higher, led by broad-based buying across sectors, with the Nifty 50 closing above 24,700. The Sensex gained 418.81 points, or 0.52%, to close at 81,018.72, while the Nifty 50 settled 157.40 points, or 0.64%, higher at 24,722.75.
Tariff Threat Impact
Trump's announcement of a possible "substantial increase" in tariffs on Indian goods has added uncertainty for exporters. Buyers may hesitate to place orders with Indian suppliers due to tariff uncertainties, especially with rival countries like Bangladesh having a tariff advantage in sectors like textiles and footwear. The rupee also plunged to a record low of 87.67 against the dollar amid the tariff turmoil.
Expert Opinions
Shrikant Chouhan, Head of Equity Research at Kotak Securities, believes that the market's texture is weak but oversold in the short term, suggesting a potential technical bounce back. He identified 80,600 and 80,500 as key support zones for the Sensex, with 81,500 - 81,800 as key resistance areas. Mayank Jain, Market Analyst at Share.Market, noted immediate resistance for the Sensex in the 81,500 – 81,700 zone, with a potential move towards 82,200 upon a breakout. He expects support between 80,700 – 80,500, with a breakdown potentially pulling the index lower towards the 80,000 – 79,800 zone. Ajit Mishra, SVP - Research, Religare Broking Ltd, advised traders to align their positions, emphasizing stock selection and effective trade management.
Nifty Open Interest (OI) Data
The highest Nifty Call open interest was observed at the 24,800 and 24,950 strike prices, signaling key resistance levels.
Overall Market Sentiment
The trends on Gift Nifty indicate a tepid start for the Indian benchmark index. The Gift Nifty was trading around 24,757 level, a discount of nearly 37 points from the Nifty futures' previous close. The market is expected to be volatile in the near term, with investors closely monitoring developments on the trade front between India and the United States.
