Indian Benchmark Indices Slip as US Tariffs Hit Indian Economy

Market Update at 9:45 AM: Indian shares opened lower on Thursday, reacting to the implementation of additional U.S. tariffs on Indian imports. The Nifty 50 was down 0.51 per cent at 24,583.75 points, while the BSE Sensex lost 0.59 per cent to trade at 80,315.2 as of 9:17 a.m. IST.

The broader market also saw declines. The Nifty Small-Cap index slipped 0.2 per cent and the Nifty Mid-Cap index was down 0.1 per cent, while 14 of the 16 major sectoral indices logged losses. Market sentiment remains cautious, with concerns that the pressure could extend in the near term.

This decline follows a sharp fall earlier in the week. On Tuesday, both the Sensex and Nifty lost nearly 1 per cent each, marking their steepest single-day percentage drop in three months, just before the new tariff measures came into effect. Domestic markets remained closed on Wednesday due to a local holiday.

The US has imposed an additional 25 per cent punitive tariff on Indian goods over New Delhi’s continued purchase of Russian oil. With this move, the overall duty on affected Indian exports rises to 50 per cent. Such policy developments could weigh on Quarterly Results of Large-Cap exporters and may also impact sentiment around upcoming IPO activity in the near term.

Pre-Market Update at 7:30 AM: Indian equity benchmarks, Sensex and Nifty 50, are expected to open lower on Thursday, August 28, as the additional 25 per cent US tariffs on Indian exports came into effect from yesterday. With this move, the cumulative tariff imposed by the US on India has reached 50 per cent, impacting several export-driven sectors, including small-cap and mid-cap companies.

As of 7:16 AM, the GIFT Nifty was trading near 24,656, up 79 points from its previous close but 39 points lower compared to Tuesday’s close. Asian markets traded mixed, while US indices closed higher overnight, with the S&P 500 touching an intraday record high.

On Tuesday, August 26, Foreign Institutional Investors (FIIs) turned net sellers, offloading equities worth Rs 6,516.49 crore. In contrast, Domestic Institutional Investors (DIIs) were buyers, with net purchases of Rs 7,060.37 crore. This marked the second consecutive trading session of buying by DIIs.

The Indian stock market witnessed a sharp sell-off on August 26, wiping out nearly Rs 6 lakh crore in investor wealth. The Sensex fell 1.04 per cent to close at 80,786.54, while the Nifty 50 slipped 1.02 per cent to settle at 24,712.05. The BSE Midcap index dropped 1.34 per cent, and the Smallcap index declined 1.68 per cent. Indian markets remained shut on Wednesday, August 27, due to Ganesh Chaturthi.

US markets closed higher on Wednesday. The Dow rose 147.16 points or 0.32 per cent to 45,565.23, the S&P 500 gained 15.46 points or 0.24 per cent to 6,481.40, and the Nasdaq advanced 45.87 points or 0.21 per cent to 21,590.14. The rally was supported by expectations of strong upcoming quarterly results and IPO activity in the US market.

The US government has imposed an additional 25 per cent tariff on Indian exports starting August 27 under an executive order by President Donald Trump. The move, linked to India’s crude oil imports from Russia, doubles the overall tariff burden to 50 per cent. Export-oriented large-cap and mid-cap companies may see short-term pressure, particularly in sectors like textiles, IT, and auto components.

The US dollar index stood steady at 98.135 after two days of declines, as bets increased for a Federal Reserve rate cut next month. Gold prices edged lower, with spot gold down 0.1 per cent at USD 3,396.56/oz amid an ongoing legal tussle between Trump and Fed Governor Lisa Cook. Crude oil prices also eased, with Brent crude futures down 0.53 per cent to USD 67.69 and WTI futures slipping 0.59 per cent to USD 63.77, following gains of over 1 per cent in the prior session.

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Disclaimer: The article is for informational purposes only and not investment advice.