GIFT Nifty hints towards muted opening; U.S. to impose 25% tariff on India

GIFT Nifty:

GIFT Nifty August 2025 futures were currently trading 16.50 points (or 0.07%) higher, suggesting a muted start for the Nifty 50 today.

Trump Tariffs:

The U.S. President Donald Trump announced on Wednesday that India will face a 25% tariff starting August 1, along with an additional 'penalty' over what he considers unfair trade practices and Indias purchases of military equipment and energy from Russia.

The 25% tariff is slightly lower than the 26% rate he declared on Liberation Day for the key trading partner but remains at the higher end of the range he was weighing. On Tuesday, Trump had indicated he was considering a rate between 20% and 25%.

Indias Ministry of Commerce and Industry has reportedly said the 'government is studying' the implications of Trumps tariff announcement.

"India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months, the ministry said in a statement. We remain committed to that objective.

Institutional Flows:

Foreign portfolio investors (FPIs) sold shares worth Rs 850.04 crore, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 1,829.11 crore in the Indian equity market on 29 July 2025, provisional data showed.

According to public data, FPIs have sold shares worth Rs 42,077.77 crore in the cash market during July 2025. This follows their cash purchase of shares worth Rs 7,488.98 crore in June 2024.

Global Markets:

Asian markets traded mostly lower on Thursday as after weakness in Chinese economic activity coupled with falling copper prices dampened investor sentiment.

Copper futures witnessed sharp sell-off after Trump said the U.S. will impose a 50% tariff on copper pipes and wiring. The details of the levy, though, fell short of the sweeping restrictions expected and left out copper input materials such as ores, concentrates and cathodes.

China's official NBS Manufacturing PMI dropped to 49.3 in July 2025 from Junes three-month high of 49.7, falling short of expectations and marking the fourth consecutive month of contraction in factory activity. It was the steepest decline since January, as output growth slowed, while both new orders and foreign sales saw their sharpest drops in three months.

The Bank of Japans policy decision remained on investors radar. Japans central bank is widely expected to stand pat on short-term interest rates at 0.5% for the fourth consecutive time, when its two-day policy meeting concludes later in the day.

Investors also assessed the U.S.′ blanket 15% tariffs on imports from South Korea. The U.S. President Donald Trump on Wednesday announced that Washington had reached a full and complete trade deal with Seoul, setting blanket tariffs on the countrys exports to U.S. at 15%.

The S&P 500 closed lower on Wednesday and gave up its gain from earlier in the session after Federal Reserve Chair Jerome Powell threw some cold water on the prospects of a September rate cut.

The broad market index lost 0.12% to close at 6,362.90. The Nasdaq Composite added 0.15% to 21,129.67, while the Dow Jones Industrial Average fell 171.71 points, or 0.38%, to finish the session at 44,461.28.

The Federal Reserve's rate-setting committee voted 9-2 on Wednesday to hold interest rates steady for the fifth consecutive meeting, with two Fed governors dissenting for the first time in more than three decades.

Fed Chair Jerome Powell's comments after the decision undercut confidence that borrowing costs would begin to fall in September.

The U.S. economic growth rebounded more than expected in the second quarter, but that measurement grossly overstated the economy's health as declining imports accounted for the bulk of the improvement and domestic demand increased at its slowest pace in two and a half years.

The US economy likely grew at an annualized rate of 2.4% in the second quarter of 2025, rebounding from a 0.5% contraction in the first quarter which was the first decline in three years.

Domestic Market:

The headline equity benchmarks closed with modest gains on Wednesday, aided by strong Q1 earnings from Larsen & Toubro (L&T). However, overall sentiment stayed cautious ahead of the U.S. Federal Reserve's policy outcome due later tonight. Investors also kept a close watch on progress in the India-U.S. trade discussions. The Nifty ended above the 24,850 level, supported by buying in IT, FMCG, and consumer durables stocks.

The S&P BSE Sensex advanced 143.91 points or 0.18% to 81,481.86. The Nifty 50 index added 33.95 points or 0.14% to 24,855.05.

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