Markets witnessed a sharp decline on Thursday as investors grappled with the impact of the United States imposing an additional 25 per cent tariff on Indian exports, taking the total levy to 50 per cent, which significantly dampened market sentiment across all major indices.
The Sensex plummeted 705.97 points or 0.87 per cent to close at 80,080.57, near its intraday low of 80,013.02, while the Nifty 50 fell 211.15 points or 0.85 per cent to settle at 24,500.90 after hitting a low of 24,481.60. The benchmark indices extended their losing streak on the monthly expiry day, with both closing deep in the red territory.
“Domestic equities ended lower as pessimism took hold following the implementation of tariffs on Indian goods, dampening investor sentiments,” said Vinod Nair, Head of Research at Geojit Investments Limited. “While the cotton import duty exemption briefly lifted hopes of policy support to counter tariff impacts, triggering a short-lived intraday recovery, investor mood remained fragile.”
Most sectors faced selling pressure, with Auto, IT, FMCG, and Metals ending in negative territory as investors turned to profit booking from recent gains. Consumer Durables emerged as the sole resilient sector, likely supported by expectations of GST rationalization and festive demand.
Among individual stocks, Titan Company led the gainers on Nifty 50, rising 1.06 per cent to ₹3,632, followed by Coal India which gained 0.68 per cent to ₹375. Hero MotoCorp advanced 0.65 per cent to ₹5,106.60, while Larsen & Toubro climbed 0.64 per cent to ₹3,564.10. Maruti Suzuki rounded up the top five gainers with a 0.57 per cent increase to ₹14,798.
On the losing side, Shriram Finance emerged as the biggest laggard, tumbling 3.94 per cent to ₹571.25, followed by HCL Technologies which declined 2.85 per cent to ₹1,450.20. Power Grid Corporation fell 2.04 per cent to ₹274.20, while Tata Consultancy Services dropped 1.88 per cent to ₹3,098. Tata Consumer Products completed the list of top five losers, declining 1.82 per cent to ₹1,060.20.
“The Indian equity market witnessed a volatile and mostly bearish expiry session on Thursday, as Donald Trump’s additional 25 per cent tariff on Indian exports and the overall levy to 50 per cent weighed heavily on sentiment,” said Hariprasad K, SEBI-registered Research Analyst and Founder of Livelong Wealth. “The Nifty has now given up all the gains for the August series, closing deep in the red with a clear bearish undertone.”
Market breadth remained weak throughout the session, with 2,651 stocks declining against 1,458 advances on the BSE, while 149 stocks remained unchanged. Out of 4,258 stocks traded, 102 hit their 52-week highs while 141 touched their 52-week lows. Nine stocks hit the upper circuit while six touched the lower circuit.
The broader market indices mirrored the weakness, with Nifty Next 50 declining 1.29 per cent to 65,940.30, while Nifty Financial Services fell 1.20 per cent to 25,640.30. Nifty Bank dropped 1.16 per cent to 53,820.35, and Nifty MidCap 100 slipped 1.27 per cent to 56,047.50.
“Markets extended their decline on monthly expiry day, losing nearly a percent and continuing the corrective trend,” noted Ajit Mishra, SVP Research at Religare Broking Ltd. “Sentiment remained under strain from the implementation of additional 25 per cent U.S. tariff, which, combined with weakness in heavyweights such as banks, is exerting steady pressure on the markets.”
The currency market also felt the heat of the trade tensions, with the rupee trading weak as selling pressure in capital markets deepened. “Rupee traded weak as selling pressure in capital markets deepened, with FII flows continuing to remain negative amid persistent concerns on India’s growth outlook and fiscal deficit,” said Jateen Trivedi, VP Research Analyst at LKP Securities. “The rupee is expected to remain under pressure with a near-term range of 87.25–88.25.”
Foreign Institutional Investors continued their selling spree, having offloaded ₹34,733 crore in August alone, adding to the market’s woes. “Adding to the pressure, Foreign Institutional Investors (FIIs) continued their selling spree, offloading ₹34,733 crore in August alone,” highlighted Hariprasad K.
In the commodities space, gold traded positively amid rupee weakness and rising international prices. “Gold traded positive amid weakness in the rupee and rising Comex prices as the Federal Reserve’s next meeting is seen leaning towards a rate cut,” said Jateen Trivedi. “Gold is expected to remain volatile but positive, with prices likely to trade in the range of ₹99,500–₹102,500.”
The steep tariffs are expected to hit India’s textiles & apparel, gems & jewellery, marine products, leather & footwear sectors the hardest, given their heavy reliance on the U.S. market. However, the government provided some relief by extending the import duty exemption on cotton until December, supporting the garment industry.
“The steep 50 per cent U.S. tariffs will hit India’s textiles & apparel, gems & jewellery, marine (shrimp), leather & footwear, the hardest, given their heavy reliance on the U.S. market,” noted Siddhartha Khemka, Head of Research at Motilal Oswal Financial Services Ltd.
Technical analysts pointed to weakening chart patterns. “Technically, the Nifty is showing strong signs of weakness. The index is now trading below its 20-day, 50-day and 100-day EMAs, all of which have started to edge lower,” said Sudeep Shah, Head of Technical Research at SBI Securities. “From a technical perspective, unless the Nifty reclaims its short-term moving averages with strong volume support, the bias is likely to remain negative in the near term.”
Looking ahead, market participants remain cautious about the near-term outlook. “Looking forward, the sentiment is expected to remain cautious with markets likely to remain rangebound as participants wait for more clarity on the India–US trade standoff and the global interest rate outlook,” said Vaibhav Vidwani, Research Analyst at Bonanza. Market watchers will closely monitor whether the government announces relief measures or initiates negotiations to safeguard export-dependent industries, while global developments continue to drive near-term market direction.