Domestic markets are likely to remain volatile amid a doubling of tariffs by the US. Besides, the settlement of monthly contracts on the NSE will add to volatility, said marketmen.
Aditi Nayar, Chief Economist, Head – Research & Outreach, , said the persisting global uncertainty is likely to further delay the domestic private capex cycle in India. “However, certain sectors such as electronics, semi-conductors and segments like electric vehicles will continue to see a scale-up in investments, in ICRA’s view.”
Gift Nifty at 24,650 signals a gap-down opening of about 200 points. September futures are ruling at 24,857.50.
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Puneet Singhania, Director at Master Trust Group, said the 25 per cent additional US , taking the aggregate duty on Indian imports to 50 per cent, has already rattled the markets. “Although defensives such as pharma and electronics remain relatively well-insulated, export-oriented sectors such as textiles, gems and jewellery, chemicals & organic compounds and agricultural stocks are encountering strong headwinds, with increased tariffs up to 50 per cent making them less competitive in the US market.,” he said.
“The markets may remain jittery as investors continue to absorb the trade shock. Export-linked stocks may experience earnings downgrades, while domestic demand-driven sectors, as well as defensives such as pharma and IT services, may experience relative interest. If the rupee continues to depreciate, it would partially shield exporters’ losses, but overall sentiment would remain cautious,” he further said.
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According to Justin Khoo, Senior Market Analyst – APAC, VT Markets, on August 27 the US raised duties on many Indian goods to a combined 50 per cent after negotiations failed and amid tension over Russian oil purchases.
The sharpest pressure falls on textiles, gems, jewellery, footwear, furniture and chemicals, while pharmaceuticals and semiconductor related electronics appear largely exempt. Steel aluminium copper products and passenger vehicles remain under earlier US regimes rather than the new layer. Indian equities fell around the announcement and the rupee weakened as foreign investors sold, though domestic buyers limited the slide. A 50 per cent tariff does not translate directly to retail prices because importers and exporters often absorb much of the cost, which limits consumer inflation, but squeezes exporter margins. In the near term, expect a softer rupee, choppier equities, and cautious foreign flows,” he said, adding that over time, supply chains may pivot toward alternative markets, while India seeks policy support and renewed talks.