Markets opened in negative territory on Thursday morning as the 50 per cent US tariff on Indian goods came into effect, with the starting at 24,711.50 from its previous close of 24,712.05 and trading at 24,586.80, down 125.25 points or 0.51 per cent, at 9.55 am. The opened at 80,754.66 against its previous close of 80,786.54 and was at 80,378.10, lower by 408.44 points or 0.51 per cent, at the same time.
The Gift Nifty had signaled a sharp gap-down opening, reflecting global concerns over the trade tensions. “The timing adds to the pressure, with today’s monthly derivatives expiry likely to make volatility almost inevitable,” said Hariprasad K, SEBI-registered Research Analyst and Founder of Livelong Wealth. The India VIX had already spiked 4 per cent to 12.2 on Tuesday, indicating heightened market swings ahead.
Export-dependent sectors faced immediate pressure as investors assessed the impact of the increased tariffs. “India faces one of the harshest tariff regimes in the world. India’s effective rate on exports to US jumps to 34 per cent – second only to China & far above ASEAN’s 16 per cent,” noted Vikram Kasat, Head-Advisory at PL Capital. He highlighted that textiles, jewellery, leather, and seafood exporters remain in the spotlight as they face the direct impact of tariffs, especially companies deriving majority revenues from the US market.
However, certain sectors showed resilience. Pharma, electronics, and steel stocks could see relative strength given their exemption from the latest duties. “Relief comes from exemptions in pharma, energy and electronics,” observed Prashanth Tapse, Senior VP Research at Mehta Equities Ltd.
Among individual stocks, Asian Paints led the gainers, rising 1.55 per cent to ₹2,519.90, followed by Hero MotoCorp which gained 1.34 per cent to ₹5,141.50. Eternal gained 1.10 per cent to ₹321.40, while SBI Life advanced 1.09 per cent to ₹1,836.40 and Adani Enterprises rose 0.99 per cent to ₹2,294.60.
On the downside, Shriram Finance topped the losers’ list, falling 2.47 per cent to ₹580.00, followed by HCL Tech which declined 2.30 per cent to ₹1,458.50. Sun Pharma dropped 1.85 per cent to ₹1,570.70, Tata Motors fell 1.43 per cent to ₹671.90, and Power Grid slipped 1.39 per cent to ₹276.00.
Technical analysts remained cautious about the near-term outlook. “On Tuesday, the Nifty hit an intra-day low of 24,689.60, breaching key supports at 24,800 and 24,700. A sustained break below 24,600 could drag the index toward the older base at 24,450,” warned Hariprasad K. He added that only a move above 24,850 may revive positive sentiment.
The broader concern extends beyond immediate market movements. “The real blind spot lies in services. India’s exports of IT & business services to the US are three times larger than goods, worth nearly 6 per cent of GDP. While untouched for now, any US move on services would strike at the heart of India’s growth model,” cautioned Kasat.
Despite the challenging environment, domestic institutional support provided some comfort. Foreign institutional investors extended their selling streak for the third straight day, offloading equities worth ₹6,516 crore on August 26. However, domestic institutional investors continued buying for the second consecutive session, purchasing equities worth ₹7,060 crore.
“Any selling by FIIs will be easily neutralised by the aggressive buying by DIIs,” said Dr. VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. He suggested that “smart money will be chasing fairly valued domestic consumption themes” given the headwinds facing export sectors.
Looking ahead, market participants will closely track potential government measures or negotiations to cushion the hardest-hit industries. The GST Council meeting scheduled for September 3-4 to review tax cuts will also be in focus. “At the end of the day India and U.S. will come together,” US Treasury Secretary Scott Bessent’s comment suggests the likely outcome, with markets expected to discount this possibility without panicking.
Traders are advised to adopt a cautious approach given the heightened volatility, with experts recommending booking partial profits on rallies and deploying tight trailing stop-losses to manage risk effectively.