Sensex, Nifty set to drop for third day as Trump’s additional 25% tariff rattles sentiment

India VIX rose marginally by 2.11 percent to close at 11.96. Despite upcoming macro triggers, volatility remains subdued and anchored near the 11 mark

Benchmark indices Nifty and Sensex are poised to extend losses for a third straight session after US President Donald Trump announced plans to double tariffs on Indian goods to 50 percent. However, markets may find some temporary relief as the fresh 25 percent levy comes with a 21-day window, giving India a brief opportunity to negotiate a trade deal. At about 7:45 pm, the Gift Nifty was at 24,552, lower by 0.32 percent.

After a choppy intraday session, bears drove Dalal Street into the red on August 6, as the Reserve Bank of India's Monetary Policy Committee's decision failed to support the benchmark indices. Further, investors decided to trim exposure to the equity markets as U.S. President Trump's repeated tariff threats roiled sentiment.

Foreign Portfolio Investors (FPIs) were net sellers to the tune of Rs 4,999 crore worth of shares in Indian equities, while domestic institutional investors (DIIs) net bought Rs 6,794 crore worth of shares, according to provisional NSE data.

The Nifty continues to trade within a tightly knit consolidation range of 24,500–24,750, as evidenced by successive small-bodied candles on the daily chart. A directional breakout from this band will likely dictate the next phase of market momentum. Until then, the Nifty may continue its sideways to choppy trajectory. The 100-day exponential moving average (100-DEMA), currently near 24,595, has consistently acted as a support threshold. However, a decisive breakdown below the 24,535–24,500 zone could trigger further downside toward 24,300–24,250. On the upside, immediate resistance is seen around 24,760, coinciding with the 10-DEMA. Unless the index convincingly reclaims this level, any rebound is expected to encounter selling pressure.

Dhupesh Dhameja of SAMCO Securities says that the Nifty Bank index is yet to stage a meaningful breakout, despite a Bullish Harami pattern forming on the daily chart. A reversal will only be confirmed if it closes above 55,700. Minor upticks continue to face selling pressure, keeping the trend weak. The index remains stretched below its short-term averages, with the 10-day EMA near 55,900 and the 20-day EMA around 56,200 acting as key resistance. On the downside, support lies at 55,100–55,000. A breach below this could trigger further selling toward 54,500–54,300, he added.

India VIX rose marginally by 2.11 percent to close at 11.96. Despite upcoming macro triggers, volatility remains subdued and anchored near the 11 mark—suggesting that the broader market is currently pricing in consolidation rather than a steep correction. This implies that while caution prevails, panic has not yet taken hold.

The Put-Call Ratio (PCR) has sharply declined from 0.72 to 0.60, highlighting growing bearish sentiment and a clear dominance of call sellers.