The headline equity benchmarks traded with minor losses in mid-afternoon trade after the US president announced a tariff rate of 27% on imports into the US from India. The Nifty traded below the 22,300 level. Oil & gas shares declined after advancing for the past two consecutive trading sessions.
At 14:30 IST, the barometer index, the S&P BSE Sensex, declined 294.91 points or 0.38% to 76,318.09. The Nifty 50 index shed 74.15 points or 0.32% to 23,257.40.
In the broader market, the S&P BSE Mid-Cap index rose 0.15% and the S&P BSE Small-Cap index added 0.63%.
The market breadth was strong. On the BSE, 2,698 shares rose and 1,195 shares fell. A total of 143 shares were unchanged.
Trump's Tariff Shock:
US President Donald Trump has announced a sweeping set of reciprocal tariffs, aiming to counter what he calls unfair trade practices. A 10% baseline tariff will be imposed on all imports starting April 5, impacting the United Kingdom, Singapore, Brazil, Australia, New Zealand, Turkey, Colombia, Argentina, El Salvador, the United Arab Emirates, and Saudi Arabia. However, around 60 countries deemed "worst offenders"—those" that impose higher tariffs on US goods or create trade barriers—will face significantly steeper tariffs beginning April 9. These include China (54%), the European Union (20%), Vietnam (46%), Thailand (36%), Japan (24%), Cambodia (49%), South Africa (30%), and Taiwan (32%). While Canada and Mexico are exempt from these new tariffs, they remain subject to previous trade measures tied to border security and fentanyl-related concerns.
Additionally, Trump has also announced a 25% tariff on all foreign-made automobiles, set to take effect at midnight on April 3.
Importantly, no new reciprocal tariffs were announced for the pharmaceutical sector. According to a White House fact sheet, drugs and certain other products—some of which are already subject to existing tariffs—will not be affected by the latest levies. However, Trump has hinted that future tariffs on pharmaceuticals, semiconductors, and other sectors may be unveiled at a later date.
India will face a 25% tariff on steel, aluminium, and auto-related goods, and no tariffs on pharmaceuticals, semiconductors, copper, or energy products. For the remaining products, India will be taxed a reciprocal tariff of 27%.
Buzzing Index:
The Nifty Oil & Gas index shed 0.48% to 10,533.85. The index added 0.20% in the past two consecutive trading sessions.
IndusInd Bank (up 2.5%), AU Small Finance Bank (up 1.65%), HDFC Bank (up 1.43%), ICICI Bank (up 0.99%), Punjab National Bank (up 0.68%), Canara Bank (up 0.58%), Bank of Baroda (up 0.38%), IDFC First Bank (up 0.26%), Kotak Mahindra Bank (up 0.26%) and State Bank of India (up 0.23%) added.
On the other hand, Axis Bank (down 0.15%), Federal Bank (down 0.1%) edged lower.
Numbers to Track:
The yield on India's 10-year benchmark federal paper was up 1.71% to 6.595 as compared with the previous close of 6.480.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 85.5700, compared with its close of 85.5200 during the previous trading session.
MCX Gold futures for 5 June 2025 settlement rose 0.09% to Rs 90,801.
The US Dollar index (DXY), which tracks the greenback's value against a basket of currencies, was down 1.39% to 102.23.
The United States 10-year bond yield tumbled 2.86% to 4.075.
In the commodities market, Brent crude for June 2025 settlement fell $2.55 or 3% to $72.70 a barrel.
Stocks in Spotlight:
Mahindra & Mahindra Financial Services shed 0.40%. The company said that its overall disbursement for Q4 FY25 was Rs 15,480 crore, which is higher by 1% as compared with Q4 FY24.
GE Power India rallied 2.66% after the company secured a purchase order worth Rs 38.2 crore from state-owned NTPC for the supply of generator parts.
ACME Solar Holdings hit an upper circuit of 5% after the company announced that it has secured a long-term project finance facility worth Rs 2,491 crore.