Cautious Start Looms for Indian Markets Amid Trump Tariff Warnings and Global Jitters

Gift Nifty hints at sluggish opening despite upbeat global mood; traders eye sector-specific plays and tariff concerns

The Indian equity market looks set for a tentative Tuesday as traders weigh overnight gains on Wall Street against a fresh wave of geopolitical anxiety. At the center of this new unease — Donald Trump’s renewed tariff rhetoric aimed squarely at India.

Gift Nifty was seen trading around the 24,740 level early this morning, a modest 53-point discount from Monday’s Nifty futures close. That’s not exactly panic mode, but it’s enough to keep investors from going all in at the opening bell.

Wall Street Surges, but the Mood Isn’t Contagious Yet

Global equities had a solid night. The Dow and S&P 500 closed firmly in the green after a wave of corporate earnings and better-than-expected ISM data lifted investor sentiment.

But here’s the catch — optimism overseas isn’t carrying the same weight back home this time.

A combination of tariff tensions and profit-booking fears have Indian investors holding back. That’s despite a relatively strong Monday where the Sensex added 418.81 points (0.52%) to close at 81,018.72, while the Nifty climbed 157.40 points (0.64%) to end at 24,722.75.

One trader put it bluntly: “The rally’s legs are still there, but they’re a little wobbly right now.”

Trump’s India Tariff Warning Sends Mixed Signals

The former U.S. President’s warning to impose higher tariffs on Indian exports — should he return to office — has made its way into investor chatter again. It’s not the first time he’s raised the threat, but it hit different this time.

Why? Because Indian exporters, especially in sectors like pharmaceuticals, IT services, and textiles, have seen a resurgence in U.S. demand recently. The idea of that momentum being disrupted is enough to stir short-term caution.

• Export-heavy stocks like TCS, Sun Pharma, and Welspun saw mild selling pressure in early pre-market trade.
• Meanwhile, investors seem to be rotating into more domestically insulated sectors — such as PSU banks and auto.

Whether Trump’s comments are political posturing or a sign of actual policy isn’t clear. But traders aren’t taking chances.

Gift Nifty’s Signal vs Reality: A Disconnect?

Gift Nifty — often treated as a reliable bellwether for Indian market open — is sending a muted signal this morning. But some analysts believe it’s painting an incomplete picture.

One equity strategist at Kotak Securities pointed out: “The Gift Nifty reflects sentiment but doesn’t always factor in domestic flows. With earnings still coming in and local institutions actively buying dips, any opening weakness could be short-lived.”

Here’s how Monday’s major indices performed:

Interestingly, the India VIX — often referred to as the “fear index” — remained subdued, suggesting there’s no mass panic, just careful positioning.

Stock Picking Is Back in Focus

Instead of riding the indices, traders are now hunting sector-specific and event-driven opportunities.

Ajit Mishra from Religare Broking noted, “This market has pockets of strength. Traders who stay nimble and selective are the ones making money.”

That translates into renewed interest in:

• Capital goods and infra companies — boosted by government spending and monsoon resilience.

• PSU banks — which continue to outperform thanks to robust Q1 earnings and asset quality improvements.

• FMCG — defensive plays gaining favor due to rising global uncertainties.

Investors are also keeping a close eye on:

• FII flows, which turned mildly positive on Monday
• Corporate earnings, particularly from auto and consumer durables
• Monsoon progress, especially after last week’s uneven rainfall data

Asian Markets Trade Higher, But China Watch Continues

Most Asian peers opened in the green this morning, tracking Wall Street’s gains. Japan’s Nikkei was up over 1%, while South Korea’s KOSPI added 0.6% early.

That’s encouraging, but eyes remain glued to China. The country’s property sector remains a wild card, and any shock from Evergrande or Country Garden could ripple across the region.

Here’s the sentiment in a nutshell: relief abroad, restraint at home.

What to Expect Today: Flat Start, Choppy Ride

Market veterans are calling for a “choppy Tuesday.” That means:

1. Flat to slightly negative opening, led by profit-booking and external worries.

2. Recovery in select midcaps, especially where earnings momentum is strong.

3. Low volumes expected in early trade, followed by pickup post-noon.

One Mumbai-based derivatives trader put it like this: “We’re not seeing panic, just tired legs after a solid run. No one wants to be the last one dancing if the music stops.”

Retail investors, meanwhile, have been increasingly active in options trade — particularly weekly expiries — which could inject some volatility by afternoon.