Indian Market Braces for Bumpy Ride After Trump’s 20-25% Tariff Threat

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(Bloomberg) — Before the trading day starts we bring you a digest of the key news and events that are likely to move markets. Today we look at:

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Good morning, this is Ashutosh Joshi, an equities reporter in Mumbai. Local traders are in for a bumpy ride this morning, thanks to President Trump‘s warning that India might face tariffs of 20%-25%, higher than those imposed on regional peers. Still, there’s a hint of optimism with Nifty futures ticking up slightly in early Wednesday trade. Investors will have their eyes on Tata Motors following reports that it is looking to acquire an Italian truckmaker. Tata Steel and carrier Indigo will be in the spotlight as they announce quarterly earnings.

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SBI’s mega QIP sparks fundraising frenzy 

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State Bank of India’s recent record-breaking share placement has kicked off a broader fundraising rush among local companies. Nearly 40 firms — mainly lenders — have announced plans to raise more than 800 billion rupees ($9.2 billion) via QIPs this month alone, according to data compiled by primedatabase.com. If the pace continues, 2025 could mark the second-largest year on record for this type of fundraising in India, as corporates move quickly to tap into bullish institutional sentiment.

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Pharma gauge lags, but stocks shine

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Even as broader pharma and healthcare indexes trail the market, dragged down by trade uncertainties and regulatory overhang, select stocks have bucked the trend. Laurus Labs has surged to a record, rallying over 50% this year on investor optimism about its pivot from generics to a contract provider of chemical compounds. Suven Life Sciences has more than doubled, reflecting a growing appetite for niche life sciences plays amid a cautious sector-wide outlook. 

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Rural sentiment fuels two-wheeler and tractor sales

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In the auto sector, rural demand is helping offset broader weakness. A favorable monsoon has lifted sentiment in rural areas, driving up sales of two-wheelers and tractors in July. Nuvama analysts also see gains in commercial vehicles, helped by rising infrastructure activity and a low base from last year. Among outperformers, TVS Motor Co. and Eicher Motors are seen as frontrunners in two-wheelers, while Mahindra & Mahindra is leading the tractor charge. As with pharma, this divergence reflects a common thread across sectors — select segments are seeing strong traction despite mixed overall conditions.

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Analysts actions:

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Three great reads from Bloomberg today:

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And, finally.. 

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The recent drop in large-cap stocks has eased some of the market froth, as forward valuations shrink. The MSCI India Index’s valuation, based on one-year ahead earnings, is inching closer to its five-year average of around 22 times, potentially creating an attractive entry point for dip buyers. Still, foreign investors — often wary of India’s rich valuations — may remain cautious, as local equities are among the most expensive in the region.

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—With assistance from Alex Gabriel Simon, Kartik Goyal and Chiranjivi Chakraborty.

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