Markets opened on a weak note Tuesday morning, with the Nifty 50 starting at 24,899.50 from its previous close of 24,967.75 and trading at 24,760.75, down 207 points or 0.83 per cent, at 9.45 am. The Sensex opened at 81,377.39 against its previous close of 81,635.91 and was at 80,973.76, lower by 662.15 points or 0.81 per cent, as investors remained cautious ahead of potential US tariff implementation on Indian goods.
The market weakness comes as traders brace for the possible rollout of 50 per cent US tariffs on Indian goods, which coincides with Wednesday’s Ganesh Chaturthi holiday. “The biggest headwind for Indian markets remains whether Nifty can scale the ‘Wall of Worry’ around the 50 per cent Trump tariff set to kick in on August 27, which threatens to make almost all of India’s $86.5 billion exports to the US commercially unviable,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.
With the US accounting for 18 per cent of India’s exports and 2.2 per cent of GDP, even a 25 per cent tariff could significantly impact economic growth. “Even a 25 per cent tariff could shave off 0.2–0.4 per cent of GDP, risking growth slipping below 6 per cent,” Tapse noted, adding that RBI Governor Sanjay Malhotra has assured policy action if tariffs hurt domestic growth.
Technical indicators suggest consolidation near key levels. “The Nifty 50 index is currently trading at 24,967, showing signs of consolidation near key resistance at 25,000,” said Vikas Jain, Head of Research at Reliance Securities. The RSI indicator hovering around 53 suggests neutral momentum, indicating potential for a breakout if buying pressure increases.
Foreign institutional investors continued their selling streak, offloading equities worth ₹2,466 crore on Monday, while domestic institutional investors provided support by purchasing ₹3,176 crore worth of shares. “Massive DII buying totally eclipsing FII selling is supporting the market even amidst strong headwinds,” observed Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.
In the banking sector, Bank Nifty traded at 55,164, down 0.02 per cent from the previous session. “Bank Nifty is trading at 55,164, down 0.02 per cent from the previous session, reflecting a cautious tone,” Jain said. The index faces resistance near 56,000 with RSI levels of 40 suggesting neutral momentum with a slight bearish bias.
Among individual stocks, Nestle India led the gainers with a 1.17 per cent rise to ₹1,166.50, followed by Hindustan Unilever gaining 0.64 per cent to ₹2,648.40. Bajaj Auto advanced 0.17 per cent to ₹8,765, Eicher Motors gained 0.16 per cent to ₹6,000 and Wipro rose 0.10 per cent to ₹254.10.
On the losing side, Sun Pharma declined 2.76 per cent to ₹1,611, Adani Enterprises fell 2.21 per cent to ₹2,252.10 and Shriram Finance dropped 1.81 per cent to ₹609.60. Dr Reddy’s Laboratories declined 1.74 per cent to ₹1,261.60, while Adani Ports slipped 1.66 per cent to ₹1,318.10.
The broader market sentiment remains cautious with elevated valuations being a concern. “Resilient market co-existing with tepid earnings growth has made India the most expensive market in the world,” Vijayakumar noted, suggesting investors may want to avoid unjustifiably expensive smallcaps and focus on largecaps which are reasonably fairly valued.
In commodities, crude oil futures traded lower on concerns over potential US tariffs on Russia. November Brent oil futures were at $67.93, down 0.43 per cent, while October WTI crude traded at $64.50, down 0.46 per cent. On the Multi Commodity Exchange, September crude oil futures declined 0.53 per cent to ₹5,668.
Gold prices rose to a two-week high following political developments in the US. “The jump in gold came after President Trump fired Federal Reserve Governor Lisa Cook over mortgage fraud accusations. This caused worry about the Fed’s independence and made investors turn to safer assets,” said Rahul Kalantri, VP Commodities, Mehta Equities Ltd.
Looking ahead, market participants are awaiting the debut performance of four IPOs scheduled for listing – Patel Retail, Vikram Solar, Shreeji Shipping and Gem Aromatics. “Their debut performance is likely to set the tone for near-term investor appetite in the broader market,” said Hariprasad K, SEBI-registered Research Analyst and Founder – Livelong Wealth.
Technical analysts suggest key levels to watch include support at 24,800 and resistance at 25,000 for Nifty. “A breach below this level could trigger further pressure towards the 24,700–24,500 range,” warned Hardik Matalia, Derivative Analyst at Choice Equity Broking Private Limited. The India VIX rose 0.26 per cent to 11.7575, indicating heightened volatility expectations.
With Wednesday being a trading holiday for Ganesh Chaturthi and the tariff implementation timeline coinciding, market participants are adopting a cautious stance. “Caution remains the buzzword as intraday rebounds may prove to be dead-cat bounces,” Tapse concluded.