Finally, the tariff is announced at 25% but the tricky part of it was that there is some unannounced tail of additional levies to be applied. Initial impact at the Gift Nifty is a sharp dive, but that is to be expected. Key element now will be how much of it is already discounted in the markets.
My take is that we were looking at around 20% ever since Indonesia was hit with 19% and Japan was levied 15%. But they had to make a whole lot of other concessions. India has been holding out against such demanded concessions (in Agri etc). Optimists in the market were hoping for 10-15% range and they will be disappointed. But chances are, that we had already priced in 20% and the reality is now 25%. Maybe there will be more back-channeling to get that reduced too.
Given that, I would think we may open weak but not progress much more. In the 24500-600 area we should end this decline.
For traders with long positions, 5 min low is first defense line. If that breaks, sell half. Then mark the 30min low. If that breaks, sell the balance. After that check for shorts etc.
Much of the announcement was about pressurising India against trades with Russia. Now how that shall be handled is only known to the Govt.
For those with overnight shorts, mark the 5 min high and cover half if that is crossed. Then mark 30min high and cover the rest if that is crossed. After that switch to longs on dips.
So, it seems like the market may decide its trends today.
Markets will at least breath a relief that the uncertainty is ending and now it can go back to more meaningful items that impact markets.
There is a very large list of results of big companies today that can help take the focus off the tariff matter for the market. So, there shall be several stock specific moves today. That too should be kept in mind as we approach the market today.
Chances therefore are that within the first 30 minutes, the impact of this Tariff business will be over.