On Tuesday, the Sensex fell 849 points and the Nifty lost 256 points, dragged by FII selling of ₹6,516 crore, though DIIs countered with purchases worth ₹7,060 crore.
Stock market investors may remain jittery in the near term as the steep 50 per cent tariff on Indian goods entering the United States came into effect from Wednesday, with sectors like textiles, gems and jewellery, leather expected to remain in focus, when the benchmark indices begin trading on Thursday, analysts said.
Market experts, however, believe that panic is unlikely since the 50 per cent tariff is not unexpected and in the near term, stocks may remain range-bound.
The additional 25 per cent tariff imposed by US President Donald Trump on India for its purchases of Russian oil came into effect Wednesday, bringing the total amount of levies imposed on New Delhi to 50 per cent.
Sectors that would bear the brunt of the high import duties imposed by the Trump administration include textiles/clothing, gems and jewellery, shrimp, leather and footwear, animal products, chemicals, and electrical and mechanical machinery.
The domestic equity market is closed on Wednesday on account of Ganesh Chaturthi.
FIIs may sell, DIIs seen cushioning fall
“The market will open with cuts. But a panic is unlikely since this 50 per cent tariff is not unexpected. FIIs may continue to sell dragging the market down. But at lower levels, there will be aggressive buying by DIIs (Domestic Institutional Investors) who are flush with funds.
“The 50 per cent tariff will impact segments like textiles, some machinery and gems and jewellery. The impact on corporate earnings will be insignificant,” V K Vijayakumar, Chief Investment Strategist, Geojit Investments Ltd, said.
Pharma, energy, electronics exempt from tariffs
Sectors such as pharma, energy products and electronic goods are out of the ambit of these sweeping duties.
“The 25 per cent additional US tariff, taking the aggregate duty on Indian imports to 50 per cent, has already rattled the markets. On August 26, Nifty fell 255.70 points to 24,712, and the Sensex declined 849.37 points to 80,786. Although defensives such as pharma and electronics remain relatively well-insulated, export-oriented sectors such as textiles, gems and jewellery, chemicals & organic compounds and agricultural are encountering strong headwinds, with increased tariffs up to 50 per cent, making them less competitive in the US market,” Puneet Singhania, Director at Master Trust Group, said.
Markets may remain jittery as investors continue to absorb the trade shock, Singhania added.
Export-linked stocks face downgrades; defensives gain
“Export-linked stocks may experience earnings downgrades, while domestic demand-driven sectors, as well as defensives such as pharma and IT services, may experience relative interest,” he said.
On Tuesday, the 30-share BSE Sensex tanked 849.37 points, or 1.04 per cent, to settle at 80,786.54, and the NSE Nifty dropped 255.70 points, or 1.02 per cent, to 24,712.05.
FII selling vs DII buying data
Foreign institutional investors (FIIs) offloaded equities worth Rs 6,516.49 crore on Tuesday, while DIIs outnumbered them by buying stocks worth Rs 7,060.37 crore, according to exchange data.
The US accounted for about 20 per cent of India’s USD 437.42 billion worth of goods exports in 2024-25.
“We think the first move will be sentiment-driven. The 25 per cent additional tariff on Indian goods, effective August 27, 2025, takes the total duty on some items close to 50 per cent, and that does raise concerns for sectors like textiles, gems and jewellery, leather, and seafood, which have a heavy US dependency.
“In the near term, the market may remain range-bound with sector rotation, not a sharp correction,” Trivesh D, COO of online discount brokerage firm Tradejini, said.
Published on August 27, 2025
