INDIA STOCKS-Indian shares slip after Trump threatens 25% tariff, penalty

By Bharath Rajeswaran and Vivek Kumar M

July 31 (Reuters) - Indian shares fell on Thursday after the United States said it would impose a 25% tariff on goods imported from the country starting August 1 and an unspecified penalty.

The Nifty 50 .NSEI fell 0.61% to 24,703.1 points and the BSE Sensex .BSESN lost 0.64% to 80,963.14 as of 9:46 a.m. IST.

All 16 major sectors logged losses. The broader small-caps .NIFSMCP100 and mid-caps .NIFMDCP100 fell about 0.6% and 0.9%, respectively.

The 25% figure would single out India more severely than other major trading partners, and threaten to unravel months of talks between the two countries.

After announcing the tariffs, President Donald Trump said the U.S. is still negotiating with India on trade.

The proposed 25% U.S. tariff on Indian goods, along with a penalty for energy and defence deals with Russia, is a clear short-term negative for exports and GDP growth, said three analysts.

With trade negotiations set to resume in mid-August, markets will remain jittery until clarity emerges, they added.

"Investors will reassess their strategies with a mix of caution and optimism after the tariffs and penalties imposed on Indian goods," said Utsav Verma, head of research at Choice Institutional Equities.

"Sectors like textiles, pharmaceuticals and automotive components are likely to be most impacted and may see reduced investor interest in the short term," Verma said.

Textile manufacturers such as Welspun Living WLSP.NS, Vardhman Textiles VART.NS and KPR Mills KPRM.NS lost between 3% and 6% after Trump's tariff and penalty threat.

Bucking the trend, chemicals maker Navin Fluorine NAFL.NS rose 4% after posting a sharp uptick in June quarter profit

IT company Sagility India SAGL.NS rose 5% on posting a seven-fold rise in the first quarter profit.

Jio Financial Services JIOF.NS rose 3% after approving a fund raise through the issuance of 500 million warrants.