Dalal Street tumbled in trade, extending losses for the third consecutive session in trade, on Thursday, August 7, after U.S. President Donald Trump announced imposing an additional 25 percent tariff on Indian goods.
The move comes in response to New Delhi’s continued purchases of Russian oil and defence equipment. After the order, the total tariff on Indian goods, barring a small exemption list, will be 50 percent.
Over the past month, the repeated tariff threats, foreign institutional investors' unrelenting sell-off, and lacklustre earnings show from India Inc. have driven the benchmark indices Nifty 50 and Sensex lower by four percent.
At noon on Wednesday, the markets were under pressure across the board. At 12:34 p.m., the Sensex was down 430.98 points or 0.54 percent at 80,113.01, and the Nifty was down 143.35 points or 0.58 percent at 24,430.85. About 1090 shares advanced, 2343 shares declined, and 120 shares unchanged.
Broader indices saw steeper losses, with the Nifty Midcap 100 and Smallcap 100 falling 0.92 percent and 0.81 percent respectively.
Sectorally, metals, realty, and energy stocks were among the worst hit, with the Nifty Metal index losing over 1 percent. Pharma, infra, and PSU banks also saw notable declines. The only gainer at midday was the Nifty Media index, which was marginally in the green.
The escalation from 25 percent to 50 percent tariffs will create sector-specific pressures rather than broad market disruption for Indian equities. The Nifty 50's limited 9 percent direct exposure to the US, primarily concentrated in IT services which remain exempt from goods-based duties, provides substantial insulation.
"However, stocks in gems and jewellery, apparel, textiles, and chemicals face immediate headwinds as these sectors represent the most vulnerable $8 billion export segment," said Nitant Darekar Research Analyst at Bonanza.
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