- President Donald Trump has seemingly lumped India together with Russia and the Sensex Index could be in for unprecedented geopolitical heat.
The Sensex Index (INDEXBOM: SENSEX)closed Thursday’s session down by 296 points, cracking under pressure from renewed US trade tariff fears. The Index swung wildly, hitting weekly highs of 81,803 points and declining to lows of 80,695 points before closing at 81, 185 points. This aligns with the uncertainty among investors who are weighing what the new tariff pressure could mean for inflows from the export market and foreign institutional investor capital.
US President Donald Trump imposed a 25% tariff on India on Wednesday and threatened additional unspecified punitive action related to India’s trade with Russia. The new rate is higher than the 15% rate imposed on EU and 10% imposed on the UK by the Trump administration, and points to India’s comparatively weaker standing among traditional US allies. However, with the August 1 deadline only hours away, some analysts see it as an attempt to get India to open up its market to more US agricultural exports.
Meanwhile, the pressure put on India to stop buying Russian oil comes amid a sour week between the US and Russia. President Trump recently gave Russia 10-12 days to end its war against Ukraine, and has accused India of enabling the war by buying Russian oil. India now finds itself in a geopolitical storm that could raise the pressure on its equities markets and the Sensex Index in the coming days. Furthermore, the heightened tough talk potentially means a trade deal between the two nations is still some way off.
Sensex Index Prediction
The momentum on Sensex Index calls for further downside below the 81,300 points pivot mark. The index will likely find initial support at 81,130. Breaking below that level will indicate a stronger momentum that could push it lower to test 80,900 points in extension.
Conversely, the Index will likely go higher if it returns above 81,300 points. If that happens, it will likely meet primary resistance at 81,510 points. Breaking above that level will invalidate the downside narrative and the resulting momentum could extend gains to test 81,707 points.
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