Profit booking, Trump tariffs deadline weigh Indian stocks; Sensex down 288 points

India stock benchmarks continued to remain in the red after the latest rally, in what analysts attribute it as profit booking by investors. Besides, analysts opine uncertainties around extension in Trump reciprocal tariffs beyond July 9, and a India-US bilateral trade agreement weighed on the Indian stock indices this week.

Today, the benchmark indices witnessed profit booking at higher levels, said Shrikant Chouhan, Head Equity Research, Kotak Securities The Nifty ended 88 points lower, while the Sensex closed 288 points lower.

Among sectors, Metal index outperformed, rallied 1.41 percent, whereas the Realty index lost the most, shedding 1.44 percent. "Technically, after a muted open, the market has been consistently facing selling pressure at higher levels," Chouhan added.

According to Vikram Kasat, Head - Advisory, PL Capital, "Indian benchmark indices closed sharply lower on Wednesday, July 2, as concerns over US trade policy and weak global cues weighed on sentiment...Markets are in a cautious mood, buffeted by U.S. tariff uncertainty and Fed policy readability. Domestic strength remains limited to select themes--metals, durables, and fresh IPO gains." Vinod Nair, Head of Research, Geojit Investments Limited, said, "Mixed global cues, particularly ahead of the impending tariff deadline, are driving investor caution. Market attention is gradually shifting to crucial Q1 earnings, which have high expectations. Underlying trends such as robust macroeconomic fundamentals and increased government expenditure continue to support market resilience. However, being at the breach level of the recent rally, a cautiousness is expected to continue in the near term."

Last week, Indian stock indices stayed in the green for the fourth straight session, lending support from positive global cues, relative peace on the Israel-Iran conflict front, and hopes of a possible extension of the July 9 tariff deadline by the US administration. India's strong domestic fundamentals, a responsive RBI, and good monsoon conditions have been supporting the financial markets. US markets are hitting all-time highs, and the US dollar is weakening; as a result, emerging markets like India are benefiting.

A comfortable inflation number in India also somewhat supported the domestic equity indices recently. In 2024, Sensex and Nifty accumulated a growth of about 9-10 per cent each. In 2023, Sensex and Nifty gained 16-17 per cent, on a cumulative basis. In 2022, they gained a mere 3 per cent each. (ANI)

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