Indian equity markets tumbled sharply on Wednesday, with the BSE Sensex and Nifty 50 both sliding to their lowest levels in three months. The sell-off was triggered by a surprise announcement from former U.S. President Donald Trump, who revealed a doubling of tariffs on select Asian imports, including key Indian exports. This move reignited fears of a global trade war and sent shockwaves through Asian financial markets.
The BSE Sensex closed down 736 points, or 1.08%, at 66,812, while the broader Nifty 50 ended 228 points lower at 19,862, marking their sharpest single-day fall since May. The benchmark indices are now down over 3% in August so far, with analysts predicting more volatility ahead.
Global Cues Drive Domestic Weakness
Market sentiment took a hit overnight after Trump, speaking at a rally in Ohio, said his campaign would push for a tariff policy overhaul if re-elected, doubling down on levies affecting India and China. This announcement sent Wall Street futures tumbling and led to a sell-off in Asia. The Nifty and BSE Sensex were quick to react, opening with a gap down and remaining under pressure throughout the trading session.
“The tariff threat is back on the table, and that spooks the market,” said Rajesh Varma, Head of Research at AngelOne. “Given India’s dependence on exports in sectors like textiles, chemicals, and IT, the reaction was swift and broad-based.”
Sectoral Bloodbath: IT, Auto, and Metals Hit Hard
All major sectoral indices ended in the red, with IT, metals, and auto stocks bearing the brunt. Infosys and TCS dropped over 2%, while Tata Motors and Maruti Suzuki lost more than 3%. The Nifty Metal Index declined by nearly 3.5%, reflecting concerns about weakened demand and higher trade barriers globally.
Foreign Institutional Investors (FIIs) were net sellers, offloading equities worth ₹1,937 crore, according to provisional data. In contrast, domestic institutional investors (DIIs) bought shares worth ₹1,204 crore, providing some cushion to the freefall.
Technical Outlook Turns Bearish
The technical charts for both the Nifty and Sensex now reflect a bearish tone. The Nifty has slipped below its 50-day moving average, a key support level, indicating potential for further downside. Analysts are watching the 19,700 level for Nifty as a crucial support zone, while 66,500 remains the next key mark for BSE Sensex.
“With the global macro situation deteriorating and domestic earnings showing mixed trends, we may see continued selling pressure unless there’s a quick reversal in global rhetoric,” said Divya Joshi, Senior Technical Analyst at Kotak Securities.
Rupee Weakens; Bond Yields Rise
Adding to investor woes, the Indian Rupee weakened to ₹84.28 per dollar, its lowest level in nearly two months. Bond yields also rose slightly as investors moved to safer assets amid rising geopolitical risks.
Meanwhile, gold prices surged by ₹800 to ₹61,200 per 10 grams in the domestic market, reflecting a flight to safety as equity investors exited riskier assets.
Outlook: Caution Advised Amid Global Uncertainty
Market experts urge caution in the coming weeks, especially with global events dictating domestic market direction. While India’s fundamentals remain strong, short-term volatility may continue to weigh on Sensex, Nifty 50, and investor sentiment.
Traders and investors are advised to remain stock-specific and avoid leveraged positions until the market stabilizes.
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