The BSE Sensex Index has crawled back in the past few days as traders wait for Donald Trump’s upcoming tariffs. It rose to a high of ₹77,415 on Monday, up from the year-to-date low of ₹72,680. It remains at almost 10% of its highest level this year. So, what next for the BSE Sensex index after forming an inverse head and shoulders pattern?
Donald Trump Liberation Day ahead
Like other global indices, the BSE Sensex Index has come under pressure in the past few weeks as investors wait for Donald Trump’s Liberation Day tariffs that will affect most countries.
India is one of the top countries that will be impacted because of its high trade surplus with the US and its high tariffs of US goods. The most recent data shows that India had a trade surplus of over $36.7 billion in the last fiscal year.
India exported goods worth over $77.5 billion and imported those worth $40.7 billion. This deficit is notable because it is the primary figure that Donald Trump focuses on when looking at trade. He believes that countries with a higher trade surplus with the US were largely stealing.
India’s top exports to the US include products like engineering goods, electronics, pharmaceuticals, and petroleum products.
Therefore, a major disruption in the trade relations between the US and India will likely have an impact on companies in the Nifty 50 and BSE Sensex index.
Some of the top companies that will be affected in this case are giants like Reliance Industries, Sun Pharmaceuticals, Tata Motors, and Mahindra & Mahindra. Firms in the services sectors like Tata Consultancy and Infosys may be affected too.
India has made some proposals to please the United States. It has proposed to remove some taxes, including the contentious Google Tax, which companies pay a 6% levy for all online advertisements. Modi has also leveraged his personal relationship with Trump to ameliorate the impact.
Still, analysts caution that reciprocal tariffs on Indian goods will come as long as it has a big surplus with the US.
Top BSE Sensex Index movers
Some BSE Sensex stocks have done well this year, helped by their market share growth and profitability. Bajaj Finance and Bajaj Finserv stocks have led the performance of the Sensex index.
Bajaj Finance published strong financial results that demonstrated that its business was doing well. Its revenue rose by 27% in the final quarter of he year, while the assets under management (AUM) rose by 28.8%. Analysts have remained upbeat about the company, with those at BNP Paribas boosting their estimates to Rs 10,700.
Kotak Mahindra Bank share price rose by 21% this year, making it the third-best performer after Bajaj Finance and Bajaj Finserv. Its business is doing well, helped by its private bank, which has continued to grow. It has added thousands of customers as it beats other companies like UBS and HSBC in their battle for wealthy Indian customers.
The other top companies in the Sensex index this year are Tata Steel, Bharti Airtel, Maruti Suzuki, ICICI Bank, Reliance Industries, and Nestle India. The top laggards in the index are IndusInd Bank, Zomato, HCL Technologies, Tech Mahindra, and Infosys.
BSE Sensex Index analysis
Sensex index chart | Source: TradingView
The daily chart shows that the Sensex index has crawled back in the past few days. It has moved above the upper side of the descending channel.
The index is slowly forming an inverse head and shoulders pattern. It has already completed the head, left shoulder, and a neckline. Therefore, the stock will likely drop to the right shoulder at ₹74,752.
Sensex index has moved to the 38.2% Fibonacci Retracement point. Therefore, the stock will likely rebound later this year, as bulls target the key resistance point at ₹82,300, its highest point in December last year.
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