Domestic equity benchmarks slipped marginally on Thursday, as investor sentiment was dampened by fresh concerns over potential US tariffs on Indian goods.
Losses in automobile, metal, and oil stocks dragged down the broader market amid mixed cues from global markets.
The Sensex declined by 185 points, or 0.23 per cent, closing at 80,358, while the Nifty 50 index dropped 54 points, or 0.22 per cent, to end at 24,519.
Among individual stocks, Hero MotoCorp led the gainers, rising 1.27 per cent. Other notable performers included Cipla, Trent, Bajaj Finserv, and HDFC Bank.
In contrast, heavyweights such as Kotak Mahindra Bank, Tata Steel, Tata Motors, Jio Financial, and State Bank of India faced losses.
Sectoral indices showed varied performances, with Nifty Metal sliding 0.54 per cent and Nifty Auto dipping 0.49 per cent.
However, the Nifty Pharma index bucked the trend by gaining 0.64 per cent, reflecting strength in healthcare stocks.
Impact of US Tariff Announcement
The decline followed US President Donald Trump’s announcement of an additional 25 per cent tariff on certain Indian goods, raising the total tariff to 50 per cent effective from August 27.
This move was reportedly in response to India’s imports of Russian crude oil, which the US accused of supporting Russia’s war efforts.
VK Vijayakumar, Chief Investment Strategist at Geojit Investments Ltd, commented, “The 21-day window before the additional tariff takes effect leaves room for negotiations and a possible deal between the US and India. However, considerable uncertainty remains about trade policy and the willingness of both sides to compromise.”
He added that while the market is unlikely to panic, the near term will witness continued weakness, especially in export-dependent sectors.
Vijayakumar also noted, “Domestic consumption themes such as banking, financial services, telecom, hotels, cement, and capital goods sectors are expected to remain resilient despite export headwinds.”
It is important to note that about half of India’s total exports to the US, valued at approximately $80 billion, are exempt from the additional tariffs.
This exemption includes critical sectors such as pharmaceuticals and electronic goods, cushioning the impact on India’s export earnings.
Global Market Overview
US equity markets closed higher overnight, supported by strong gains in technology stocks.
The Nasdaq Composite surged 1.21 per cent, the Dow Jones Industrial Average increased 0.18 per cent, and the S&P 500 rose 0.73 per cent.
Asian markets mostly ended in positive territory.
Japan’s Nikkei 225 advanced 0.78 per cent, South Korea’s Kospi gained 0.46 per cent, and Hong Kong’s Hang Seng Index inched up 0.17 per cent.
However, Chinese markets experienced losses amid ongoing economic concerns.
On Wednesday, foreign portfolio investors (FPIs) net sold Indian equities worth Rs 4,999 crore.
Conversely, domestic institutional investors (DIIs) remained net buyers, purchasing shares valued at Rs 6,794 crore, indicating continued confidence in the Indian market from domestic players.
The Indian markets now await further developments on the US tariff front, which will influence investor sentiment in the days ahead.
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