The tariff concerns overshadowed positive global cues, where US markets had rebounded strongly on Monday as investors bought the dip following weak jobs data that increased expectations of a Federal Reserve rate cut in September.
Markets opened on a weak note Tuesday morning, with the Sensex opening at 80,946.43, slightly below its previous close of 81,018.72, and slipping further to 80,582.79 at 10 am, down 435.93 points or 0.54 per cent. The Nifty 50 also opened nearly flat at 24,720.25 compared to its previous close of 24,722.75, before easing to 24,600.25 at 10:00 am, down 122.50 points or 0.50 per cent.
The subdued opening came after US President Trump threatened to “substantially raise US tariffs on India” for buying Russian oil, creating uncertainty around India-US trade relations and potential impact on corporate earnings. “If he walks his talk, the India-US relations will further strain and the impact on India’s exports to the US can be worse than thought earlier,” said Dr VK Vijayakumar, Chief Investment Strategist at Geojit Investments Limited. “India’s GDP growth and corporate earnings in FY26 also will be impacted.”
Market analysts had anticipated the weak start based on lacklustre trends in Gift Nifty, though optimism in other Asian markets provided some hope for intraday recovery. “Markets could see a subdued to weak opening in view of the lacklustre trend seen in Gift Nifty index, but optimism in other Asian gauges may aid intra-day recovery in local shares,” said Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd.
Banking stocks showed mixed performance in early trade, with IndusInd Bank leading gains among Nifty 50 constituents, rising 2.30 per cent to ₹822.55. State Bank of India gained 0.57 per cent to ₹800.20, while Axis Bank advanced 0.50 per cent to ₹1,073.90. However, the broader Bank Nifty remained under pressure as investors maintained caution ahead of the RBI’s upcoming policy meeting.
On the downside, Adani Enterprises fell 1.62 per cent to ₹2,325.40, while Infosys declined 1.51 per cent to ₹1,458.10. Bharat Electronics Limited dropped 1.40 per cent to ₹384.10, and Adani Ports shed 1.33 per cent to ₹1,370.40. Reliance Industries, the largest constituent by weightage, declined 0.95 per cent to ₹1,398.10.
Technical analysts warned of continued volatility ahead. “With a fresh threat by the US government to substantially raise tariffs on India over import of Russian oil, domestic markets may continue to witness bouts of intra-day volatility amid nervousness amongst the investors,” Tapse added. “Technically, Nifty bulls are likely to be at bay as long as the 25000 mark is a hurdle, while the bears are likely to be everywhere on any close below the 24473 mark.”
The tariff concerns overshadowed positive global cues, where US markets had rebounded strongly on Monday as investors bought the dip following weak jobs data that increased expectations of a Federal Reserve rate cut in September. “US Investors bought the market’s dip, helping indexes rebound from their worst week since Liberation Day,” said Vikram Kasat, Head – Advisory at PL Capital. “Bulls are increasingly confident that Federal Reserve will have to cut interest rates in September.”
Commodity markets showed mixed trends with bullion gaining on safe-haven demand. Gold prices touched ₹1,00,167 per 10 grams for 24 karat, while silver reached ₹1,11,900 per kg. “Gold and silver prices gained due to disappointing US job data, which raised the likelihood of a Fed rate cut in September,” said Rahul Kalantri, VP Commodities at Mehta Equities Ltd. “Bullion was further supported after the US President threatened higher tariffs on India over Russian oil imports.”
Crude oil prices steadied near $66.30 per barrel after a three-day decline, with markets digesting OPEC+’s planned output hike while geopolitical tensions from the tariff threats added to uncertainty. “Fresh concerns over potential oversupply weighed on sentiment. Meanwhile, geopolitical tensions flared after President Trump threatened higher tariffs on India over Russian oil imports, clouding the energy trade outlook,” Kalantri explained.
Sectoral performance showed divergence with auto and metals stocks expected to outperform, while oil & gas, defence, realty, media, and capital market sectors likely to underperform. “Technically, Nifty Auto and FMCG are likely to outperform in the short term. On the flip side, Nifty Oil & Gas, Defence, Realty, Media, Capital Market, and CPSE are likely to underperform in the short term,” according to SBI Securities.
Foreign institutional investors continued their selling spree, offloading ₹2,566.51 crore worth of stocks in the cash segment on Monday, while domestic institutional investors provided support by purchasing ₹4,386.29 crore worth of equities.
Market participants remained cautious about the near-term outlook given the elevated valuations and geopolitical uncertainties. “The market, still trading at elevated valuations, has not discounted such an eventuality,” Vijayakumar noted. “This means, the market is in uncharted territory in the near-term. If Trump raises tariffs on India further the market will react negatively breaking the Nifty support of 24500.”
Technical support levels for the day were seen at 24,550 for Nifty with resistance at 24,900, while Sensex found support at 80,600-80,500 zone with immediate hurdle at 81,400-81,500 levels.
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Published on August 5, 2025
