India's financials withstand tariff turmoil, backed by strong updates and cheap valuations

Bank of Baroda

04/04/2025 10:26

** India's financial services index .NIFTYFIN rose 0.2% on Friday, bucking the broader market decline

** The Nifty 50 .NSEI has slipped 2% in two sessions since U.S. President Donald Trump announced reciprocal tariffs on India and others

** Financials held steady, supported by strong pre-quarterly updates from HDFC Bank HDBK.NS, Bajaj Finance BJFN.NS, Bank of Baroda BOB.NS, and RBL Bank RATB.NS

** "Strong business updates have supported financials even as broader sentiment remains weak," says Aishvarya Dadheech, CIO of Fident Asset Management

** Analysts believe U.S.-linked growth fears may push the RBI to accelerate rate cuts, which could lower banks' funding costs despite margin pressure

** Financial stocks are also benefiting from cheaper valuations, attracting investor interest, Dadheech adds

** The financial services index is up 5.3% in 2025, outperforming the Nifty 50’s 3.3% drop

(Reporting by Bharath Rajeswaran in Bengaluru)

((bharath.rajeswaran@thomsonreuters.com; +91 9769003463;))