Markets slide for second session amid global weakness, tariff Concerns

Market Today

Indian equity benchmarks ended lower for a second consecutive session on August 1, mirroring global market weakness as heightened US tariffs dampened investor sentiment.

At close, the Sensex fell 0.5 percent, shedding 420 points to end at 80,761.70, while the Nifty declined 0.61 percent or 151 points to settle at 24,620.

Asian markets were largely in the red, with indices in South Korea, Japan, China and Hong Kong trading lower. The negative trend followed weak closing on Wall Street, and US futures indicating a subdued start, further dampening investor confidence.

"Investor sentiment weakened further as FIIs now hold the second-highest net short position in derivatives, reflecting elevated caution. Globally, markets turned negative amid rising U.S. inflation and trade tensions. While the sell-off was broad-based, FMCG stocks emerged as a defensive play, supported by attractive valuations, resilient demand, and relative immunity to external trade disruptions" said Vinod Nair, Head of Research, Geojit Investments

Sectoral indices were broadly in the red, with Nifty Pharma emerging as the biggest loser, dropping 3.3 percent following US President Donald Trump’s call for drugmakers to slash prices. Nifty IT and Nifty Metal also saw sharp declines, each down over 1.5 percent, while Nifty Realty and Nifty Auto slipped 1.3 percent and 0.6 percent, respectively.

The broader market sentiment took a hit after President Trump imposed a 25 percent tariff plus penalty on Indian imports, raising concerns over trade dynamics. However, economists believe the GDP impact for India will remain contained, estimated between 0.1 to 0.3 percentage points. Despite the near-term disruptions, India is expected to continue benefiting from global supply chain shifts.

Technically, the Nifty continues to struggle near resistance. Anand James, Chief Market Strategist at Geojit Financial Services, noted that the index once again failed to decisively cross the 24,960 level. He maintains a cautiously optimistic stance, stating that sustained trade above 24,675 could trigger another upswing, while a breakdown below the 24,650–24,600 zone could lead to a fall toward 24,450. A breakout above 25,000 could potentially push the index towards 25,330, he added.