Tale of the Tape 

Hey guys. We’re back after a short break!

Markets were volatile AF! Nifty and Sensex brushed off Trump’s tariff threats to recover sharply in the second half of trade; ending with minor gains. Midcaps (+0.3%) and Smallcaps (+0.2%) also bounced back to end in the green. Most sectors were up. Against all odds, IT(+0.9%) and Pharma (+0.8%) were the top gainers. Energy (-0.2%) saw minor cuts.

In today’s issue of the newsletter, we unpack Trump’s latest trade bazooka, why Hero MotoCorp was the top Nifty gainer, Trent’s fading star, JSW Cement’s IPO and more.

Honorable mentions:

Eternal (+1.3%) was in focus after Ant Group sold their remaining stake. Bajaj Auto (+1%) will launch its first e-rickshaw on Aug 10. BHEL tanked -5% on weak results.

Check out the NSE 500 heatmap:

Market
Bring It On POTUS!

India now has one of the HIGHEST rates of US tariffs! That’s right. Trump hit us with another 25% yesterday as a Russia penalty which means our total burden is a whopping 50% with effect from August 27. There’s a lot to unpack here, so here’s what you need to know.

Let’s get the awful outta the way first. A 50% tariff rate makes every sector unviable. Don’t bother getting into the weeds and analysing industry by industry. Everyone from gems & jewellery and footwear, to textiles and seafood say you can’t absorb this kinda hit. Exporters will lose market share to rivals, fire thousands and move some manufacturing operations abroad. To top it all off, analysts are now expecting up to -110 bps hit to India’s FY26 GDP.  

Modi seems prepared for the economic fallout: "For us, our farmers' welfare is supreme.. India will never compromise on the wellbeing of its farmers, dairy. And I know personally I will have to pay a heavy price for it.”

That said, it’s not all gloom and doom. Markets didn’t really collapse today as investors were prepared for a big hit after Trump’s tantrum last week. There are also two things to watch out for:

• Trade negotiations: Investors seem confident Modi will pull off a deal. Experts say it’s harder than it looks. But the extra 25% penalty kicks in only from August 27, so we have three weeks to sort sh*t out.

• GOI support:  Every industry is calling out for help. It’s almost certain the GOI will do something but the question is what. Are we looking at credit guarantee packages like that were rolled out during Covid? Or tax exemptions as exporters look to weather out the storm?

TL;DR: Trump's pressure tactics have put India in a tough spot, but we've got three weeks to negotiate before the full 50% hit kicks in. Markets are cautiously optimistic about a potential deal and likely GOI support soon. Let's hope for the best.

Specials
3 Stocks On Traders’ Radar

Wondering what stocks the pros are tracking? In our latest video, we reveal three stocks that SEBI RAs have recently added to their Stocktwits watchlist!