Trump tariffs drags Sensex 300pts amid volatility; IT, pharma in focus

 

Investors responded cautiously to US President Donald Trump's retaliatory tariffs, as domestic benchmarks, Sensex and Nifty50, settled lower on Thursday. The 30-share Sensex ended down by 322.08 points, or 0.42 per cent, at 76,295.36, while the Nifty50 closed at 23,250.10, down by 82.25 points, or 0.35 per cent.

 

Among sectors, information technology (IT) and pharma remained in focus for most of the day. While the Nifty IT index lost 4.21 per cent due to US recession fears, investors found comfort in the pharma sector, which was spared harsh treatment in the sweeping tariffs announced by US President Donald Trump.

 

 

Among the Nifty IT constituents, Persistent Systems, Coforge, and Mphasis were the top laggards, ending lower by up to 9.75 per cent.

 

From the pharma space, IPCA Labs, Lupin, and Natco Pharma were among the top gainers, climbing by up to 4.5 per cent.

 

The tariff tantrum

Overnight in the US, President Trump announced retaliatory tariffs on 180 countries on April 2. The new tariff features a baseline 10 per cent tax on all US imports, with additional higher tariffs imposed on countries with a trade surplus. India faces a 27 per cent tariff on US exports.

 

Among broader baskets, small-cap shares posted gains of half a per cent, while mid-cap shares settled with marginal gains.

 

Vinod Nair, Head of Research at Geojit Investments, attributed the broader market performance to robust domestic macroeconomic data and lower crude oil prices.

 

“Although the tariff presents short-term challenges, India's economic resilience and bilateral trade agreements may help mitigate the overall impact,” Nair said.

 

The market’s measured response to the US tariffs, according to Ajit Mishra, SVP of Research at Religare Broking, “reflects expectations of ongoing trade discussions between India and the US, as well as the possibility of higher tariffs impacting other countries more significantly, limiting the impact on Indian exports.” 

Nifty50 finds support at 23,100 

For Nifty50, the sentiment remains strong, according to Rupak De, senior technical analyst at LKP Securities. He noted that the Indian market showed resilience despite weak global equity trends caused by Trump's tariffs.

 

"Short-term support is placed at 23,100, and as long as the Nifty stays above this level, the trend is likely to remain strong. On the higher end, it may move towards 23,430, and a decisive move above this level could trigger a stronger rally," De said.

 

From a technical perspective, Mishara expects traders to monitor the 20-day exponential moving average (DEMA) at 23,100. "A break below this level could intensify selling pressure, potentially dragging the index toward 22,800," Mishara said. Conversely, holding above this level, Mishara believes, would likely sustain the range-bound movement.