Trump tariff announcement timing, stocks to watch; Sensex, Nifty levels & more

Markets across Wall Street to Dalal Street are on a high alert, as the US President Donald Trump readies fresh salvo against its trading partners on the 'Liberation Day', slapping reciprocal tariffs with immediate effect, in a bid to tackle rising trade deficit. The move would not only hit exports to the US, as a first order effect. In most likelihood, it may stoke inflation in the US, weigh on US consumer demand and could even lead to recession in the world's largest economy. This could eat into export demand globally.   

Trump’s decision on reciprocal taxes would introduce a new wave of uncertainty in global trade dynamics, said Amit Jain, Co-Founder of Ashika Global Family Office Services.

"For India, this could mean short-term volatility in equity markets, especially in export-driven sectors like automobile, pharma and IT. While selective large-cap stocks from these sectors may face pressure due to tariffs headwinds, India’s strong domestic consumption story remains intact," he said. 

Indian Standard Time, Trump would make announcement at 1:30 am on April 3 (8 PM GMT, April 2). For India, sectors such as pharmaceuticals, auto and auto component, information technology (IT), textiles, gem & jewellery and electronics could be at the receiving end.   

"If tariffs target key sectors like IT or pharmaceuticals, Indian companies with significant US revenue could face headwinds. However, if tariffs mainly focus on China, Indian exporters might benefit from some trade diversion," said Narinder Wadhwa, Managing director & CEO of SKI capital Services.

Wadhwa said if US markets react sharply today, Indian IT and export-driven stocks could see selling pressure.

If the US applies 10 per cent broad tariffs, India can potentially lose $6 billion or 0.16 per cent GDP in exports to the US. This loss may mount to $31 billion if 25 per cent tariffs are imposed, Emkay Global anticipated. 

"We recommend a cautious stance and favor a hedged approach until there is greater clarity on the index’s next directional move. However, stocks continue to offer trading opportunities on both sides, and participants should position themselves accordingly," said Ajit Mishra – SVP, Research at Religare Broking.

Stocks, sectors to watch
A 25 per cent tariff on auto and auto component imports to US would hit companies such as Tata Motors (JLR), Sona BLW Precision Forgings Ltd (Sona Comstar), Samvardhana Motherson and Bharat Forge. Analysts noted that 31 per cent of JLR's retail sales come from the US and that many of its models are made in the UK. Tata Motors thus, is, exposed to the higher duty. US has been a relatively lower-margin market for JLR. Among other companies, Sona BLW derives 43 per cent of its revenue from the US, Bharat Forge 38 per cent. 
For Bharat Forge, 28 per cent of consolidated revenue in 9MFY25 were from the US. Motherson Sumi's 18 per cent revenue comes from the US. 

As per some estimates, domestic pharma sector could attract as high as 35 per cent tariff -- 10 per cent country reciprocal tariff and 25 per cent sector-specific tariff. But such an extreme outcome is highly unlikely, Nomura said adding that most pharma companies that it interacted with indicated that they would look at passing the impact of tariffs to customers.

Nomura noted that Aurobindo Pharma is the largest Indian generic company with US sales of $1.6 billion in Calendar 2024. The drugmaker has three manufacturing sites in the US, but the contribution from these sites are limited. The impact on Dr Reddy’s is seen relatively higher due to high dependence on US market. 

"The tariffs on Canada can be higher than in other countries. The US has applied a tariff of 25% on imports from Canada. This can adversely impact the competitive strength of Taro. The overall impact of tariff for Sun Pharma is relatively low due to high contribution to profit from India and other emerging markets," Nomura said.

In the case of IT sector, tariffs could results in muted FY26 guidance by domestic IT exporters as uncertainty over client demand may only rise going ahead. 

"We forecast the tariff-led elevated level of uncertainty, shall reflect on the commentary and guidance by the companies. We do believe the recovery in discretionary spends might be delayed, but not by much. We are trimming estimates and target prices to reflect that, but the 15 correction in the last 3 months captures it," Nuvama Institutional Equities said.

Sensex, Nifty support levels
As long as the Sensex and Nifty are trading above 23,150 and 76,000. the pullback formation is likely to continue, said Shrikant Chouhan, Head Equity Research at Kotak Securities said.

"On the upside, Nifty/Sensex could move up to 23,500/77,000. A dismissal of 23,500/77,000 on Nifty /Sensex could push the market towards 23,650/77,500. Conversely, if the market falls below 23,150/76,000, selling pressure may intensify, and the indices could slip to the 23,000-22,950/75,500-75,300 range," Chouhan said.