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Below the Quote on Weekly Market Commentary by Mr. Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services Ltd

Last week, benchmark indices Sensex and Nifty 50 declined by 2.6% each. Nifty ended at 22,904 level, breaking below the 23k mark following a global sell-off sparked by U.S. President Trump’s tariff announcements and renewed concerns over economic slowdown. Broader market witnessed selling pressure, with Nifty Midcap100 and Nifty Smallcap100 falling by 2% and 2.6% respectively. Amongst sectors, IT was the worst performer, plunging by 9% on concerns over reduced IT spending in the US. Nifty Metal slumped 7.5% due to potential disruption of business activities amid global trade war. Auto and pharma indices followed with loss of 3% each. FMCG and banking sectors were flat to positive, showing resilience amid negative global market cues. This week, Indian markets are expected to be volatile on the back concerns over the impact of the US reciprocal tariffs and potential announcements of further sector specific tariffs during the week. Also, focus will be on RBI’s monetary policy outcome on 9th April, where the market is expecting another 25 bps rate cut, and the Q4FY25 earnings season kicking off with TCS results on 10th April. Investors will also watch out for March CPI data from US and India to be released this week. We believe that though the 27% tariffs on India are higher than expected, it is relatively lower compared to that levied on countries like China (34% + 20% earlier), Vietnam (46%), Thailand (36%), Indonesia (32%) and Bangladesh (37%) which compete with India for the export share; thus improving India’s potential export competitiveness. Overall, we expect that the impact of reciprocal tariffs on India will be limited on a national basis as India’s exports in the six most vulnerable sectors amount to only 1.1% of India’s GDP. There is possibility that the impact could further be reduced as India is in the process of negotiating a bilateral agreement with the US. 

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