Markets witnessed a sharp selloff on Tuesday, with benchmark indices closing significantly lower as the US prepared to impose steep tariffs on Indian goods effective Wednesday. The BSE Sensex plummeted 849.37 points or 1.04 per cent to close at 80,786.54, while the NSE Nifty50 declined 255.70 points or 1.02 per cent to end at 24,712.05.
The primary catalyst behind the market decline was the imminent implementation of US President Donald Trump’s additional 25 per cent tariffs on Indian goods, effective August 27, 2025. This brings the total tariff on Indian exports to the US to a steep 50 per cent, among the highest faced by any major trading partner. The US Department of Homeland Security officially notified this decision, citing India’s continued purchase of Russian crude oil as justification for the punitive measures.
Brokerages flag trade concerns
“Indian equities came under pressure as concerns over US trade policy dampened sentiment after Washington issued a draft notice proposing tariffs of up to 50 per cent on Indian exports, effective from Wednesday,” noted Ashika Institutional Equities in their market commentary.
The selloff was broad-based, with 2,891 stocks declining compared to only 1,220 advancing on the BSE. The broader markets underperformed significantly, with the BSE MidCap index falling 1.3 per cent and the SmallCap index declining 1.7 per cent. The Nifty Midcap 100 dropped 935.30 points or 1.62 per cent to 56,766.20.
Sectoral performance was largely negative, with only FMCG managing to buck the trend. “Barring FMCG, all indices ended in the red, with PSU Banks, Metals, Pharma, Oil & Gas, Consumer Durables, Realty, and Telecom losing between 1–2 per cent,” said Amruta Shinde, Technical & Derivative Analyst at Choice Equity Broking.
Among individual stocks, Eicher Motors emerged as the top gainer on Nifty 50, rising 2.68 per cent to ₹6,151.00. Hindustan Unilever gained 2.32 per cent to ₹2,692.70, while Maruti Suzuki advanced 1.85 per cent to ₹14,720.00. ITC and Nestle India also posted modest gains of 1.00 per cent and 0.54 per cent, respectively.
On the losing side, Shriram Finance led the decline, falling 4.03 per cent to ₹595.85. Sun Pharma dropped 3.35 per cent to ₹1,601.20, Tata Steel declined 2.87 per cent to ₹155.05, Bajaj Finance fell 2.75 per cent to ₹876.00, and Trent slipped 2.45 per cent to ₹5,290.00.
Volatility index jumps
Market volatility surged, with the India VIX jumping 3.7 per cent to 12.19, indicating increased uncertainty among investors. “The India VIX jumped nearly 4 per cent to 12.2, signalling a pickup in market uncertainty,” observed Hariprasad K, Research Analyst at Livelong Wealth.
Banking stocks faced particular pressure, with the Bank Nifty closing 688.85 points, or 1.25 per cent, lower at 54,450.45. The index has been underperforming, falling below its 100-day EMA for the first time since April 2025. “Bank Nifty has slipped below its 100-day EMA for the first time since April 2025, marking a key technical breakdown,” noted Sudeep Shah from SBI Securities.
Rupee weakens further
The Indian rupee extended its weakness, depreciating 0.18 per cent to trade near 87.75 against the dollar. “The rupee extended its weakness, falling by 0.18 to trade near 87.75, as fresh pressure emerged after the US imposed an additional 25 per cent tariff,” said Jateen Trivedi from LKP Securities.
“Domestic market sentiment turned cautious as the US penalty tariff deadline expires tomorrow. The persistent depreciation of the INR is adding pressure and may further impact foreign institutional inflows,” commented Vinod Nair from Geojit Investments.
Gold shines amid turmoil
Gold prices provided some respite, gaining $6 on Comex and ₹200 on MCX to settle near $3,372 and ₹1,00,850, respectively. “Gold maintains a positive bias with an expected trading range of ₹99,000–₹1,02,000,” Trivedi added.
Technical analysts warned of further downside. “The Nifty fell sharply, breaking below the support level of 24,800. In the short term, the index is likely to remain under selling pressure as long as it trades below 24,850,” said Rupak De from LKP Securities.
Markets will remain closed on Wednesday for Ganesh Chaturthi. Looking ahead, investors will closely monitor any potential deferral of the secondary tariffs on Indian goods, as this could significantly improve near-term market sentiment when trading resumes on Thursday.