Market mood soured after U.S. President Donald Trump doubled tariffs on Indian goods to 50%, stating that no trade talks would take place until the dispute was resolved.
Gaurav Garg,
Lemonn Markets Desk
Mumbai, August 8, 2025: Indian equity benchmarks ended sharply lower on Friday, surrendering the previous session’s gains as renewed tariff concerns and persistent foreign fund outflows weighed on sentiment. The Sensex fell 787.65 points, or 0.98%, to close at 79,835.61, while the Nifty dropped 232.85 points, or 0.95%, to 24,363.30. The sell-off was broad-based, with Bharti Airtel, Adani Enterprises, Shriram Finance, Grasim Industries, and IndusInd Bank among the major laggards, sliding up to 3% intraday. Market mood soured after U.S. President Donald Trump doubled tariffs on Indian goods to 50%, stating that no trade talks would take place until the dispute was resolved.
Adding to the pressure, Foreign Institutional Investors sold equities worth Rs4,997.19 crore on Thursday, while weak global cues from Asian markets and a mixed Wall Street close kept traders cautious. The rupee weakened by 5 paise to 87.63 against the U.S. dollar, as sustained foreign outflows and a firm greenback overshadowed RBI intervention. Meanwhile, the India VIX rose over 1% to 11.84, reflecting heightened investor caution. On the technical front, analysts noted that while the Nifty showed some intraday recovery from lows, upside may remain capped unless it decisively moves above the 24,670–24,717 zone, with key support at 24,548.
Shrikant Chouhan, Head Equity Research, Kotak Securities, adds: Indian equity market remained weak this week amid news flow with respect to tariff announcement. The Indian market was impacted as the US government imposed an additional 25% penalty on top of 25% tariffs on Indian exports. BSE Sensex and NSE Nifty ended the week with negative returns. The BSE midcap and the BSE small cap indices underperformed the larger peers and closed the week ~1-1.5% lower. On the sectoral front, autos and metals were key gainers, while healthcare, FMCG and realty were the major losers.
While the Q1FY26 earnings has broadly been in line with estimates, the outlook remained muted, resulting in continued cuts in earnings estimates. The RBI kept the repo rate unchanged at 5.5% after cumulative rate cuts of 100 bps in the last three policy meetings. We now expect a prolonged pause, with additional rate cuts likely only if the growth outlook deteriorates or inflation surprises on the downside. FII’s continued their selling in the Indian equity markets and remained net sellers this week.
