Sensex down 350 pts, Nifty below 24,650 as US unleashes tariffs; pharma, IT, metal stocks tumble

India VIX rose 1.65 percent to 11.73, indicating slightly higher market volatility.

Benchmark indices Nifty and Sensex slipped sharply after a brief recovery, weighed down by a sell-off in pharma, IT, and metal stocks, marking a second straight session of losses. Sentiment took a hit after fresh tariff actions by the US, with Donald Trump unexpectedly hiking import duties on Canadian goods to 35 percent from 25 percent.

At about 12:45 pm, the Sensex was down 324.56 points or 0.40 percent at 80,861.02, and the Nifty was down 124.25 points or 0.50 percent at 24,644.10. About 1399 shares advanced, 2005 shares declined, and 135 shares remained unchanged.

"Since the date of implementation of the modified tariff rates is August 7th, that gives countries time to negotiate and bring the tariffs down. That may happen," says V K Vijayakumar, Chief Investment Strategist at Geojit Investments Limited.

"An important trend in the market is the weakness in the broader market, particularly the smallcaps. This trend is likely to continue given the high valuations of the segment. Sustained selling by the FIIs continues to be a negative. The sharp surge in the dollar index to 100 will nudge the FIIs to continue selling, putting pressure on large caps too. Investors can adopt a wait-and-watch strategy," he added.

Sectoral indices were largely in the red on Friday. Nifty Pharma led the losses with a sharp 2.84 percent drop, followed by Nifty IT and Oil & Gas, which fell 1.26 percent and 1.05 percent, respectively. Nifty Metal declined 0.93 percent, while Auto, Infra, Realty, and Midcap 100 indices also saw notable declines. Nifty FMCG and Media were the only gainers, rising 0.86 percent and 1.03 percent, respectively. Other sectors, including Bank, Private Bank, Consumer Durables, and Smallcap 100, edged lower. India VIX rose 1.65 percent to 11.73, indicating slightly higher market volatility.

Among movers, shares of PNB Housing Finance fell sharply by over 15 percent on August 1, a day after the lender informed that the resignation of MD and CEO Girish Kousgi has been accepted by the board, a move that some brokerage notes have cited as negative, given his role in transforming PNB Housing, scaling new businesses and improving asset quality.

Hindustan Unilever (HUL) jumped nearly 8 percent on August 1, taking the stock's gains in two days to 12 percent. This comes after brokerages issued positive notes for the stock after the release of the firm's April-June quarter results. The FMCG major reported a 6 percent year-on-year rise in consolidated net profit to Rs 2,768 crore for the quarter ended June 2025, aided by lower tax expenses and volume-led sales growth across key categories. Revenue grew 5 percent to Rs 16,323 crore.

Shares of Swiggy fell as much as 4 percent after its net loss widened almost 96 percent year-on-year (YoY) to Rs 1,197 crore in the first quarter (Q1) of financial year 2025-26 (FY26), up from Rs 611 crore in the same period a year ago. The gains follow two foreign brokerages issuing bullish calls on the stock, citing positive growth levels. Jefferies has upgraded the counter to a buy, while Morgan Stanley maintained its overweight rating.

"Nifty opened weak but staged a strong recovery to touch 24,950, only to face resistance near the 50-EMA and end around 24,750 amid profit booking. Sentiment remains cautious, with crucial support at 24,500—holding above it is key to maintaining the current trend. A breakout above 25,000 is needed to turn the bias positive. Sensex was volatile, facing resistance near its 50-EMA at 81,800 but holding above the 100-EMA at 80,800. A decisive move above 82,050 is needed for further upside, while 80,500 remains a critical support. For the day, Nifty support is seen at 24,600 and resistance at 25,000," Vaishali Parekh, Vice President of Technical Research at PL Capital, says.

Trent, Asian Paints, HUL, Eicher Motors, and ITC were the top gainers on the Nifty. Laggards on the index included Dr Reddy's, Sun Pharma, Cipla, Tata Steel, and ONGC.