Market Turmoil: U.S. Tariffs Trigger Indian Stock Plunge
Indian stock markets plummeted after the U.S. announced a 25% tariff on Indian imports. The Nifty 50 fell 255.70 points and the BSE Sensex dropped 849.37 points. Analysts highlight broad market weakness and pressure, particularly in banking. With tariffs effective August 27, volatility is anticipated.
- Country:
- India
The Indian stock market experienced a significant downturn on Tuesday following a notification from the Trump administration about a 25% tariff on Indian imports. This increase will take total tariffs on Indian goods to 50% and is set to be implemented from August 27. Consequently, stock markets faced substantial pressure and dropped below key support levels, disrupting the recent recovery trend.
At closing, the Nifty 50 index at the National Stock Exchange witnessed a decline of 255.70 points, translating to a 1.02% drop, landing at 24,712.05. Simultaneously, the BSE Sensex diminished by 849.37 points, marking a 1.04% decrease, to settle at 80,786.54. Sudeep Shah, Head of Technical Research and Derivatives at SBI Securities, noted that this announcement spurred a wave of risk-averse sentiment, resulting in widespread market weakness.
The Bank Nifty index has been underperforming in comparison to other indices, showing signs of increasing pressure in the banking sector. It continued its decline past its previous swing low on Tuesday, reaffirming a bearish outlook. The index hit a swing low of 55,000, indicating potential further declines towards the 53,500 to 52,700 range.
While most indices ended negatively, the FMCG index stood out as an exception, with the small-cap index emerging as the most affected, losing over 2%. Market expert Kunal Shah of Mirae Asset ShareKhan commented on the persisting broader market turmoil, predicting a continuation in the near term.
Praveen Dwarakanath, Vice President at Hedged.in, emphasized the impact of the secondary tariffs on market dynamics. He noted that the impending tariff on India by the U.S., set to take effect on August 27, could introduce volatility, and any revisions might counter the negative trend.
Ajay Bagga, a banking and market expert, conveyed to ANI that investors are cautious ahead of the upcoming implementation of these U.S. tariffs, further contributing to market unrest.
(With inputs from agencies.)
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