Stock Market Today: Indian Equity Indices Under Pressure Due to US Tariff Hike
Indian stock markets are expected to open on a muted note on August 8, Friday, as global trade tensions weigh on investor sentiment. The announcement by US President Donald Trump to double tariffs on Indian goods has triggered concerns among traders and investors alike. Nifty 50 and Sensex may experience early losses before finding support at crucial levels.
Key Highlights:
- Nifty and Sensex may see a flat-to-negative start.
- Trump imposes 50% tariff on Indian goods, citing Russian oil and defense deals.
- Markets staged a strong last-hour recovery on August 7.
- Global cues and technical indicators hint at short-term volatility.
US Tariffs on Indian Goods Rise to 50%: What Triggered the Move?
On Wednesday, US President Donald Trump signed an executive order imposing an additional 25% tariff on Indian imports, raising the total tariff to 50%. This move was seen as a response to India’s strategic relations with Russia, particularly its continued imports of Russian oil and military equipment, despite ongoing US-led sanctions.
Impact on Market Sentiment:
- The announcement led to an initial sell-off in Indian equities during Thursday’s session.
- Concerns over export competitiveness, inflation, and trade imbalances grew among market participants.
- The development has added to the list of geopolitical and macroeconomic headwinds already affecting Indian markets.
Market Recap: Nifty, Sensex Recovered Despite Tariff Shock
Intraday Movement – August 7:
The Indian markets began the session sharply lower, reacting to the tariff announcement. However, in a surprising turn of events, both Nifty and Sensex staged a sharp recovery in the final hour, closing marginally higher for the day.
- Nifty 50 closed at 24,715, up by 34 points.
- BSE Sensex ended the session at 81,060, gaining 110 points.
- Buying was seen in sectors like FMCG, IT, and banking.
What Supported the Recovery?
- Hopes of diplomatic talks between the US and Russia gave some relief to global sentiment.
- Short covering and value buying at lower levels helped indices bounce back.
Nifty 50: Technical Outlook and Key Levels to Watch on August 8
Nifty 50 Support and Resistance:
According to analysts, Nifty 50 is currently trading within a narrow range, but recent price action suggests short-term momentum may build if key resistance levels are breached.
Key Technical Levels:
- Immediate Support: 24,500
- Crucial Resistance: 24,700–24,850
- Breakout Zone: Above 24,900
“A sustainable move above 24,850–24,900 could signal the start of a fresh uptrend. On the downside, if 24,500 is breached, expect a slide toward 24,300,” said a technical analyst at a leading brokerage firm.
Sensex Outlook: Focus on 80,500 and 81,300 Levels
The BSE Sensex is trading with a neutral bias, as investors weigh global cues against domestic strength.
Key Levels to Track:
- Support Zone: 80,500–80,300
- Resistance Zone: 81,300–81,500
A move above 81,500 could encourage buying across frontline stocks, especially in the banking and IT sectors, while a breakdown below 80,300 could lead to renewed selling.
Global Cues: Tariffs, Russia, Oil Prices to Dominate Sentiment
US-India Trade Tensions Escalate:
Trump’s tariff decision marks a significant escalation in US-India trade relations, which could potentially impact bilateral trade volumes, especially in sectors like textiles, pharmaceuticals, and auto components.
Crude Oil and Currency Watch:
- Brent crude is trading near $85 per barrel, with India likely to feel the heat if the rupee weakens further.
- The Indian Rupee (INR) closed weaker against the US Dollar at ₹84.12, pressured by a strong greenback and trade tensions.
Sectoral Impact: Which Stocks to Watch?
Likely Gainers:
- IT Stocks: With a weaker rupee, exporters like TCS, Infosys, and Wipro may benefit.
- FMCG and Pharma: Defensive sectors may outperform during uncertain times.
Likely Losers:
- Auto and Metal Stocks: These sectors may come under pressure due to increased input costs and export barriers.
- Export-oriented SMEs: Small and mid-cap exporters may see earnings downgraded if tariffs persist.
Expert Opinion: Short-Term Caution, Long-Term Opportunity
“While the tariff decision is negative in the short term, India remains a key growth market. Investors should use dips as opportunities to accumulate quality stocks, especially in domestic-facing sectors,” said Ramesh Shah, Head of Research, Equity Insights.
Trading Strategy for August 8: Cautious Optimism Advised
Suggested Trading Plan:
- Positional traders can wait for a decisive move above 24,850 on Nifty for long positions.
- Short-term traders should maintain tight stop losses and monitor global headlines.
- Investors may focus on large-cap defensives and IT stocks for short-term safety.
Conclusion: All Eyes on Global Talks and Domestic Resilience
As Indian stock markets brace for a cautious start on August 8, the focus will remain on:
- Developments around US-Russia diplomacy
- Clarity on India’s tariff response
- Currency movements and oil prices
Despite the immediate concerns over trade protectionism, the Indian economy’s strong fundamentals, domestic demand, and ongoing Q1 corporate earnings may provide medium-term support.
