Stock market indices Sensex and Nifty conclude a volatile session with marginal gains
In contrast to the global anticipation of a critical U.S. tariff deadline on July 9, 2025, the Indian stock market experienced a relatively muted response. Despite the uncertainty surrounding potential tariffs, markets remained steady, with investors adopting a "wait-and-see" approach.
Several prominent Indian companies, such as Infosys, SBI, Tech Mahindra, Mahindra & Mahindra, Tata Steel, Sun Pharma, and Eternal, did not suffer a significant negative impact from the U.S. tariffs on or immediately after July 9. Analysts suggest that this limited reaction is due to the market's strategic adaptation to trade friction, with increased diversification and investment in countries like India serving as a hedge against China exposure.
Moreover, it appears that India was not on the list of countries facing new reciprocal U.S. tariffs as of July 18, and there is a reasonable prospect of a "mini trade deal" between the U.S. and India before July 31, potentially keeping tariffs on Indian goods below 20%. This likely provided some reassurance to the market.
However, it's important to note that prolonged uncertainty could eventually weigh on business investment and consumer sentiment if no trade resolution is reached. As of now, this has not materialized in stock prices or trading volumes.
Interestingly, U.S. President Donald Trump also announced potential tariffs on semiconductors, but the impact on the Indian stock market and the companies mentioned was not immediate or significant.
Mukul Kochhar of Investec Capital Services stated that July 9 was a critical date for India’s external finances and the rupee, but not a day when “something is going to break” in the markets. His greater concern was the absence of a trade deal in the next few months. Despite the lack of a sudden downturn or sector-specific damage due to tariffs, the market outlook remains "pretty okay" under the assumption that a reasonable agreement will be reached.
In conclusion, the market reaction has been muted, with no specific evidence that U.S. tariffs caused a notable decline in the Indian stock market or in the shares of the companies mentioned this week. The focus remains on whether a U.S.-India trade deal can be secured in the coming weeks.
References: [1] The Economic Times, July 9, 2025 [2] Bloomberg, July 10, 2025 [4] Business Standard, July 18, 2025
The limited reaction seen in the Indian stock market and the companies like Infosys, SBI, Tech Mahindra, Mahindra & Mahindra, Tata Steel, Sun Pharma, and Eternal, can be attributed to the market's strategic adaptation to trade friction, leading to increased diversification and investment in countries like India as a hedge against China exposure. Despite the absence of a sudden downturn or sector-specific damage due to tariffs, the focus of investors remains on securing a U.S.-India trade deal in the coming weeks, as prolonged uncertainty could potentially weigh on business investment and consumer sentiment.
