Stock Market Outlook: Sensex, Nifty To Trade Under Pressure Amid Trump Tariff Shock; Gift Nifty Slips 180 pts

Indian equity markets are poised for a weak start on July 31, as investors react to U.S. President Trump's unexpected announcement of a 25% tariff on Indian imports and additional penalties for the country's defense and energy deals with Russia. The move is expected to significantly impact India's trade-dependent sectors, particularly export-oriented businesses, dampening near-term market sentiment.

Gift Nifty Today After Trump Tariff Announcement

As of 7:25 AM IST on July 31, 2025, Gift Nifty was trading at 24,674.00, down 180 points or 0.72%, indicating a weak start for Indian equities. During the early morning session, it moved within a day range of 24,650.00 to 24,700.50. On a broader scale, the index has fluctuated between 21,827.00 and 26,440.50 over the past 52 weeks.

Gift Nifty, the key indicator used to predict market's opening, dropped significantly by 0.70 percent on July 30, falling below the 24,700 mark around 6:25 PM. The decline followed an announcement by U.S. President Trump, declaring a 25 percent tariff on India and additional penalties for its energy and defense dealings with Russia, effective August 1.

Stock Market Outlook July 31

On July 30, the stock market ended on a flat note, with marginal gains in benchmark indices. The Sensex closed 144 points higher at 81,482 (up 0.18%), while the Nifty 50 gained 34 points to end at 24,855 (up 0.14%). However, market participants are bracing for potential declines today as the full impact of the U.S. tariffs begins to set in.

Tariff impact on Indian stock market: How Sensex, Nifty Will React To It Today?

As a result of the 25% U.S. tariff on Indian imports, both the Sensex and Nifty are likely to open lower and may experience downward pressure throughout the day. The U.S. remains one of India's key trading partners, and this sudden move introduces fresh uncertainty into an already cautious market environment. Analysts expect muted trade activity with the U.S. in the short term.

"Markets are expected to remain in consolidation mode, with stock-specific action likely as the earnings season progresses," said Siddhartha Khemka, Head of Research, Wealth Management, Motilal Oswal Financial Services Ltd.

"The recent announcement by Trump to impose 25% tariffs along with a penalty for purchasing arms and energy from Russia comes as a big blow for India. With the US being one of the key export destinations, this will severely impact the sectors," said Colin Shah, MD, Kama Jewelry.

"Going ahead, we expect trade activities to remain muted with US. However, we also need to wait and watch how the situation unfolds post the sixth round of India-US Bilateral Trade Agreeement talks that will take place in August end with US counterparts on their arrival in India," the expert added.

Nifty Prediction Today: Technical View

From a technical perspective, the Nifty 50 formed a small bearish candle on the daily chart with a slight lower shadow. This pattern suggests that the recent trend of lower highs and lower lows may be reversing, pointing to sideways or rangebound movement for now. The index is likely to face resistance between 24,900 and 25,000.

Options data supports this view. The highest Call open interest is at the 25,000 level (1.57 crore contracts), indicating that many traders expect this to be a tough level for Nifty to cross. There's also strong Call activity at the 24,900 level, which adds to the selling pressure. Meanwhile, Call unwinding at 24,800 and 24,700 suggests that traders might be adjusting for a possible move down.

On the Put side, support seems to be forming at the 24,800 strike, which has the most open interest (1.12 crore contracts). Strong Put writing at 24,850 and 24,900 shows that bulls are trying to hold these levels. However, if the index drops below these support points, it could lead to more downside.

Global Cues: Mixed Signals from Asian and the US Market

Globally, the reaction has been mixed. In Asia, markets showed some resilience despite the tariff shock. Japan's Nikkei 225 gained 0.55%, the Topix index rose 0.28%, and South Korea's Kospi added 0.41%. However, Hong Kong's Hang Seng futures hinted at a weaker opening, possibly reflecting more direct trade exposure to global uncertainties.

On Wall Street, U.S. indices ended mixed on Wednesday. The Dow Jones fell by 171.71 points (0.38%) to close at 44,461.28, while the S&P 500 dropped 0.12% to 6,362.90. The Nasdaq Composite bucked the trend slightly, closing 0.15% higher at 21,129.67. The movement followed the Federal Reserve's decision to hold interest rates steady, with Chair Jerome Powell signaling lower odds of a rate cut at the September meeting.

Volatility Indicator: India VIX Trends Lower

Despite the looming tariff pressures, India VIX which is often referred to as the "fear index" fell further by 2.78% to 11.20 on July 30. This continued decline in volatility suggests that the broader market is not yet pricing in extreme panic, though that could change quickly if negative headlines continue to emerge or if global equities weaken further.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.