The benchmark equity indices declined sharply on Thursday as investor sentiment weakened following the announcement of US tariffs on Indian goods and penalties linked to energy and defence imports from Russia.
At around 10: 30 a.m., Sensex plunged 618.88 points or 0.76 percent to 80,862.98, while the broader Nifty dropped to 24,671.25, down 183.80 points or 0.74 percent.
Reliance Industries, Tata Motors, Mahindra & Mahindra, Bharti Airtel, Titan and State Bank of India were the major laggards.
Key factors behind the market slide:
1) US Tariffs on India: US President Donald Trump announced a 25 percent tariff on all Indian goods effective August 1, along with an unspecified penalty for India’s continued purchases of Russian crude oil and military equipment. The development is being viewed as a pressure tactic amidst ongoing trade discussions.
"The imposition of a 25 percent tariff, along with penalties related to Russian imports, is negative for Indian exports and could weigh on near-term GDP growth," said V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
2) FII Selling: Foreign Institutional Investors (FIIs) net sold equities worth Rs 850.04 crore on Wednesday. Persistent selling by FIIs typically exerts downward pressure on stock valuations and dampens investor confidence.
3) Weak Global Cues: Asian markets traded mostly lower, with benchmarks in South Korea, China, and Hong Kong in the red. US equities also ended on a mixed note overnight, adding to the cautious sentiment.
4) Rupee Pressure: The Indian rupee rebounded by 14 paise to 87.66 against the US dollar in early trade, following potential RBI intervention. However, it remained under pressure after recording a sharp 89 paise fall in the previous session — its steepest single-day decline in over three years. A weaker rupee increases import costs and can worsen the trade deficit, affecting macroeconomic stability.
Technical Outlook
Anand James, Chief Market Strategist at Geojit Financial Services, said the Nifty saw rejection trades after breaching the 24,900 level, heightening chances of a retest at 24,650.
“Upside attempts post a gap-down open are likely. The 24,788 mark is seen as a crucial pivot. A fall below 24,650–24,600 could open the door to 24,450. However, a sustained breakdown appears less likely for the day,” he added. “Holding above 24,788 would be viewed positively, but a move past the 24,960–25,050 zone is necessary for any upside toward 25,330.”
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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