
India’s financial markets are expected to open on a cautious note today, reacting to the United States’ decision to impose a 25 percent retaliatory tariff on Indian goods starting Thursday. The move is widely seen as a response to India’s continued oil purchases from Russia, despite sustained pressure from Washington.
The Indian government has reiterated it will not yield to US demands to halt Russian crude imports, and the market is likely to respond with support for the government’s firm stance. However, concerns remain that any attempts to substitute Russian oil with supplies from elsewhere could push crude prices beyond $100 per barrel, especially considering India currently imports around 1.75 lakh barrels per day from Russia.
The US tariff officially comes into effect today, along with similar levies on other countries. India’s separate retaliatory tariff hike will take effect on August 28, while increased tariffs on Chinese goods are slated for implementation on August 12. Talks between the US and China may resume in the meantime.
Once the new tariffs are in place, India and Brazil will be among the nations facing the highest duty rates at 50 percent. India is expected to push for tariff reductions in upcoming discussions, with a US delegation due in New Delhi on August 25. Analysts believe the US is using these tariffs as leverage to press India to allow more agricultural imports and reduce or eliminate tariffs on American products — demands the Indian side considers unacceptable.
The tariff announcement is also expected to put pressure on the rupee. A rebound in the dollar index this morning adds to the downside risk for the Indian currency. On Wednesday, the Reserve Bank of India kept interest rates unchanged and projected inflation would ease further before rising again from January. The central bank maintained its GDP growth forecast.
Asian markets are trading mixed, while US futures indicate modest gains. The Gift Nifty closed at 24,536.50 on Wednesday night and opened at 24,537 this morning, climbing to 24,576 — suggesting a mildly positive start for Indian equities.
In Europe, markets moved in divergent directions. The STOXX 600 slipped marginally, while other indices ended with small gains. Swiss stocks, facing a 39 percent tariff on pharmaceutical exports, fell nearly 1 percent amid a threat to hike medicine export tariffs by 250 percent within 18 months. German, French and UK indices posted minor gains.
US markets rallied on Wednesday, buoyed by Apple’s announcement of an additional $10 billion capital investment — on top of a previously pledged $50 billion over four years. Strong results from Arista Networks (+17 percent) and McDonald’s (+3 percent) contrasted with weak earnings from Snap (-17 percent) and AMD (-6 percent).
The Dow Jones Industrial Average rose 81.38 points (0.18 percent) to close at 44,193.12. The S&P 500 gained 45.87 points (0.73 percent) to end at 6,345.06, while the Nasdaq Composite surged 252.87 points (1.21 percent) to 21,169.42. US futures remained positive, with the Dow up 0.10 percent, the S&P 500 up 0.25 percent, and Nasdaq futures rising 0.27 percent. The semiconductor and chip sector came into focus after Trump announced a 100 percent import tariff on these goods post-market hours.
Airbnb jumped 7 percent on optimism over business growth.
Despite the RBI maintaining rates, Indian equity markets failed to rally, with investor sentiment clouded by the US tariff announcement. Analysts expect markets to broadly align with the government's position without triggering a collapse, with brokers and institutional investors expected to stabilise the trading environment.
Export-driven sectors bore the brunt, especially garments and pharmaceuticals. Apparel exporters with heavy US exposure saw significant declines — shares of Gokaldas, Vardhman, Welspun, Raymond, Trident, Indo Count, Pearl Global, and KPR Mills fell up to 20 percent over the past week. Gokaldas Exports, which earns around 70 percent of its revenue from the US, reported a 53 percent increase in net profit, yet its stock fell 4.5 percent.
Pharma stocks including Aurobindo, Lupin, Dr Reddy’s, Sun Pharma, Torrent, Cipla, Divi’s, Mankind, Zydus, Glenmark, Laurus, Biocon, and Alkem also dropped as much as 3.5 percent.
Apart from banks, nearly all sectors closed lower. Pharma, IT, real estate, healthcare, consumer durables, FMCG, auto, and metals all posted losses. Mid cap and small cap indices fell more sharply than the main benchmarks. Defence stocks rose on news of ₹69,000 crore worth of defence procurement approvals.
The Nifty fell 75.35 points (0.31 percent) to close at 24,574.20, and the Sensex dropped 106.26 points (0.21 percent) to end at 80,543.99. The Bank Nifty gained 50.90 points (0.09 percent) to settle at 55,411.15. The Nifty Midcap 100 lost 457.10 points (0.80 percent) to 56,749.75, while the Smallcap 100 dropped 201.95 points (1.13 percent) to 17,662.60.
On the broader BSE market, 1,289 stocks rose while 2,780 declined. On the NSE, 844 stocks advanced and 2,127 declined. While 35 stocks hit 52-week highs, 85 touched 52-week lows. Upper circuit breakers were triggered in 62 stocks, and lower circuits in 95.
Foreign institutional investors sold shares worth ₹4,999.10 crore in the cash market on Wednesday, while domestic funds bought stocks worth ₹6,794.28 crore.
Nifty momentum indicators remain bearish. Analysts expect the tariff to weigh on the market today. Nifty is likely to find support at 24,510 and 24,460, with resistance seen at 24,650 and 24,680.
Gold prices dipped slightly. On Wednesday, gold fell $11.20 to close at $3,370.40 per ounce. This morning, it traded at $3,372. In Kerala, the gold price rose ₹80 to ₹75,040 per sovereign — touching the record high last seen on July 23.
Silver was quoted at $37.82 per ounce.
In global markets, rubber rose 0.90 percent to 167.60 cents/kg. Cocoa climbed 1.28 percent to $8,470 per tonne, while coffee declined 1.77 percent. Tea remained steady, and palm oil fell 0.23 percent.
The dollar index slipped to 98.18 on Wednesday and inched up to 98.30 this morning. The euro rose to $1.1653 and the pound to $1.3348. The Japanese yen strengthened to 147.58 per dollar. US 10-year bond yields edged up to 4.24 percent.
The dollar’s weakness lifted the rupee on Wednesday, which closed 7 paise higher at ₹87.73. However, the rupee may weaken again today on concerns about the new US tariff. Market participants see the dollar potentially breaching the ₹88 mark. The Chinese yuan remained steady at 7.18 per dollar.
Crude oil prices dipped on Wednesday but rebounded this morning. Brent crude climbed 0.5 percent to $67.46 per barrel. WTI traded at $64.92 and Murban crude at $69.58. Natural gas prices rose 0.60 percent.
Cryptocurrencies saw renewed gains. Bitcoin rose above $115,000, while Ether jumped 3.5 percent to $3,700.