INDIA STOCKS-India's stock benchmarks muted on tariff jitters; Trump says India deal close

By Vivek Kumar M and Bharath Rajeswaran

July 8 (Reuters) - India's benchmark shares were muted on Tuesday after U.S. President Donald Trump delayed implementation of tariffs to August 1 and announced steep import levies on several trading partners, while signalling an India deal was close.

The Nifty 50 .NSEI fell 0.04% to 25,450.5 points and the BSE Sensex .BSESN lost 0.02% to 83,420.22, as of 10:28 a.m. IST.

Both the benchmarks traded between 0.2% gain and 0.2% loss in early trade.

Seven of the 13 major sectors logged losses. The high weightage financials .NIFTYFIN and private banks .NIFPVTBNK rose 0.4% and 0.8%, respectively, both led by Kotak Mahindra Bank's KTKM.NS 4% jump after reporting robust June quarter deposit and loan growth.

The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 fell 0.3% each.

Trump said on Monday that a deal with India was close, as he announced a 25% levy on key Asian allies, including Japan and South Korea, while extending the tariff deadline to August 1 from July 9, allowing more time for negotiations.

"Trump's remark that the U.S. is close to a trade deal with India is a positive, and if a deal is announced, it could trigger a relief rally as the removal of uncertainty would likely prompt a positive market reaction," said Devarsh Vakil, head of prime research at HDFC Securities.

However, the looming tariffs weighed on market sentiment, with analysts saying that lingering trade uncertainty could have a greater impact as businesses defer decisions.

Wall Street slid overnight, while Asian markets reversed early losses on hopes that tariff talks would continue after Trump said he was open to proposals. MKTS/GLOB

Among individual stocks, Titan TITN.NS tumbled 5.3% after underwhelming June-quarter sales, while Divi's Labs DIVI.NS gained 2% on an HSBC upgrade.

Indian textile firms Alok Industries ALOK.NS, KPR Mill KPRM.NS and Vardhman Textiles VART.NS rose after the U.S. imposed 35% tariffs on Bangladesh, a key garment exporter, while Trump hinted at a trade deal with India.