Domestic equities struggled on Thursday as investors digested the impact of steep tariff hikes imposed by the US on Indian goods, sparking concerns over export competitiveness and economic fallout.
The latest US move has effectively doubled tariffs on Indian exports to 50 per cent, placing India among the hardest-hit trade partners alongside Brazil and China. Analysts warn that labour-intensive sectors such as textiles, gems and jewellery, and seafood could face the maximum pain.
Trading resumed after the Ganesh Chaturthi break on a cautious note. The BSE Sensex ended the session below 80,100, crashing more than 700 points, while the NSE Nifty50 settled for the day at 24,501, clocking a loss of over 200 points.
On the 30-share Sensex, Titan, L&T, Maruti, Axis Bank, and Reliance settled among the gainers. Meanwhile, HCL Tech, TCS, PowerGrid, Infosys, and HUL closed the day among the laggards.
In the broader markets, the Nifty Smallcap 100 bled 1.45 per cent. Sectorally, the Midsmall Financial Services plummeted 1.90 per cent.
Notably, the Sensex slipped more than 100 points at the open, below the 80,700 mark and the Nifty50 too fell over 50 points to 24,657 around 9:15 AM. Selling pressure intensified as the day progressed, with the Sensex plunging nearly 600 points by 9:26 AM, falling under 80,200. A weak trend in GIFT Nifty, which was down nearly 100 points ahead of the session, also hinted at a subdued start.
Foreign outflows also weighed on investor sentiments as foreign institutional investors dumped Indian equities worth Rs 6,516.49 crore on Tuesday, official depository data revealed. Domestic institutional investors turned net buyers and infused Rs 7,060.37 crore into the market.
Textile, Seafood Exports At High Risk
Moody’s Analytics cautioned that demand for Indian goods in the US could take a hit. “The drop in sales to their largest client will hurt,” it said, warning that exporters may be forced to slash prices to retain orders, eroding profitability. Gems and jewellery exporters, who ship goods worth $28.5 billion annually with the US as their biggest buyer, face a significant setback. Shrimp exporters, too, are heavily exposed, as the US accounts for more than half of India’s seafood sales.
Pharma shipments, however, remain shielded from the fresh duties. India supplies about 6 per cent of America’s drug imports, and these remain exempt, offering a cushion amid wider trade disruptions. Meanwhile, economists say the fresh duties will stoke inflationary pressures in the US. Higher costs for electronics, automobiles, and consumer goods could keep price growth elevated above the Federal Reserve’s 2 per cent target well into 2026.
How Did Markets Fare On Tuesday?
The tariff concerns had already rattled markets earlier in the week. On Tuesday, the Sensex shed nearly 850 points to close at 80,786.54, while the Nifty50 dropped more than 250 points to finish just above the 24,700 mark.
