Indian Equity Benchmarks Off to Muted Start as US tariffs Dent Sentiment

Market Update at 10:00 AM: India’s equity benchmarks opened on a muted note on Friday, extending weakness after two consecutive sessions of declines. The sentiment remained subdued following the imposition of steep U.S. tariffs on Indian goods earlier this week.

The Nifty 50 fell 0.14 per cent to 24,466.7 points, while the BSE Sensex eased 0.09 per cent to 80,010.83 as of 9:15 a.m. IST. Both indices had dropped about 2 per cent each in the previous two sessions, weighed down by concerns over the potential impact of higher duties.

Market breadth was weak with twelve of the sixteen major sectors trading in negative territory at the open. The Small-Cap and Mid-Cap indices were flat, showing limited participation compared to Large-Cap stocks.

The trigger came after U.S. President Donald Trump imposed an additional 25 per cent tariff on Indian goods, citing New Delhi’s purchase of Russian oil. This move came on top of the earlier 25 per cent duty, raising fears of pressure on export-oriented companies across sectors.

Pre-Market Update at 7:45 AM: Indian equity benchmarks, Sensex and Nifty 50, are expected to open higher on Friday, August 29, following positive global cues. As of 7:27 AM, the GIFT Nifty was trading near 24,669, up 168 points from the previous close. Asian markets traded mostly lower, while the US markets ended at record highs, with the S&P 500 and Dow Jones scaling fresh closing records.

On Thursday, August 28, Foreign Institutional Investors (FIIs) remained net sellers, pulling out Rs 3,856.51 crore. This marked the fourth consecutive session of selling. In contrast, Domestic Institutional Investors (DIIs) continued their buying streak for the third straight session, purchasing equities worth Rs 6,920.34 crore.

The Indian equity indices extended their decline for the second day, pressured by concerns over fresh US tariffs on Indian exports. The Nifty 50 closed 0.85 per cent lower at 24,500.9, while the BSE Sensex slipped 0.87 per cent to settle at 80,080.57. Over the past two sessions, both benchmarks have collectively fallen nearly 2 per cent.

India’s Index of Industrial Production (IIP) rose 3.5 per cent in July, the highest in four months, mainly supported by the manufacturing sector. In comparison, IIP grew 5 per cent in July 2023. For the April–July period of FY25, IIP rose 2.3 per cent, slower than the 5.4 per cent recorded in the same period last year. In June, the growth was only 1.5 per cent.

US markets closed higher on Thursday despite Nvidia’s Quarterly Results missing lofty expectations. The S&P 500 advanced 0.32 per cent to finish at 6,501.86, while the Nasdaq gained 0.53 per cent to close at 21,705.16. The Dow Jones Industrial Average rose 0.16 per cent, ending at 45,636.90.

The US economy expanded faster than estimated in Q2, with GDP growing at 3.3 per cent annually, compared to the earlier estimate of 3.0 per cent. In Q1, the economy contracted 0.5 per cent, its first quarterly decline in three years. Jobless claims dropped by 5,000 to 229,000 for the week ending August 23, indicating continued strength in the labour market.

On monetary policy, Federal Reserve Governor Christopher Waller hinted at the possibility of a 25-basis-point rate cut in the September 16–17 FOMC meeting, with further gradual cuts likely to follow.

The US dollar index stood at 97.917, on track for a monthly decline of nearly 2 per cent, as expectations of Fed rate cuts increased. Gold prices held steady near a one-month high at USD 3,413.80 per ounce, marking a 3.6 per cent rise in August. Crude oil prices were lower, with Brent crude at USD 68.12 a barrel and WTI futures at USD 64.15 a barrel, both on track for monthly declines.

There are no stocks banned for trading in the F&O segment today

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