Tariff worries, foreigners' selling weigh on Indian markets

Indian equity markets remain under pressure as investors balance concerns over US tariffs with expectations for the April–June GDP figures due later today. After two sessions of declines, traders are hoping for a relief rally, though analysts caution that any rebound is unlikely to be strong given sustained foreign investor selling.

Trade and policy anxieties

Talks between India and the US on resolving the 50 percent tariff dispute have yet to begin, fuelling uncertainty for exporters. Industry groups warn that if no agreement is reached within the next few months, the impact could be severe. Reports also suggest India is reconsidering entry into the RCEP trade pact and is preparing to start free-trade negotiations with the European Union in September.

However, with global trade tensions rising and Washington issuing sharp criticism of New Delhi, concerns are growing that India’s economic momentum could weaken in the second half of the year.

Industry output shows mixed trend

India’s Index of Industrial Production (IIP) rose 3.5 percent in July, the fastest pace in four months, compared with 1.5 percent in June and 4.7 percent a year earlier. Analysts expect growth to top 5 percent in August, largely due to last year’s low base. But they caution that weaker exports from tariff pressure and lower domestic sales due to GST could dampen output in the months ahead.

GDP data awaited

The April–June GDP print will be released on Friday. Forecasts from agencies range between 6.5 and 7 percent growth. The Reserve Bank of India has projected 6.5 percent. In the previous quarter (January–March), GDP expanded 7.4 percent, while a year earlier the April–June growth rate stood at 6.7 percent.

In the US, April–June growth was revised up to 3.3 percent, compared with an earlier estimate of 3 percent, driven by strong household spending and a steep 29.8 percent fall in imports. First-half GDP growth is now placed at 1.4 percent.

Global market moves

US equities closed higher overnight, with the S&P 500 surpassing 6,500 for the first time. The Dow Jones and Nasdaq also ended at record levels. Nvidia shares slipped 0.8 percent after earnings, but investor optimism over artificial intelligence prospects supported sentiment. Futures, however, point to slight weakness this morning ahead of key US inflation data.

European stocks fell on Thursday, with the exception of France. EU car registrations rose 7.4 percent in July, boosted by a 39.1 percent surge in electric vehicle sales, led by Chinese maker BYD. Tesla’s sales, by contrast, dropped 33.6 percent.

Asian markets were mixed in early trading today. Japan’s Nikkei fell 0.5 percent, while South Korea and Australia gained. Hong Kong and Shanghai opened higher.

Sensex extends losses

Indian benchmarks slipped further on Thursday as foreign investors sold heavily in response to tariff concerns. The Sensex fell 706 points, or 0.87 percent, to close at 80,080.57, while the Nifty 50 lost 211 points, or 0.85 percent, to end at 24,500.90. The Bank Nifty dropped 1.16 percent, with broader markets also under pressure.

Foreign portfolio investors sold a net ₹3,856.51 crore in cash equities, while domestic institutions bought ₹6,920.34 crore. Market breadth remained weak, with losers outnumbering gainers nearly two to one on both NSE and BSE.

Technical analysts noted that the Nifty remains below its 20-, 50- and 100-day exponential moving averages, with the RSI at 40.79, signalling continued bearish momentum. Support is seen at 24,425 and 24,345, with resistance at 24,645 and 24,785.

Gold, foreign exchange

Gold surged as the dollar softened and expectations grew for US interest-rate cuts. Spot gold climbed $21.20 to $3,418.70 per ounce, with prices briefly hitting $3,478.70. Analysts say gold could reach $4,000 per ounce in 2026 if the dollar weakens further. In Kerala, retail gold rose ₹120 to ₹75,240 per sovereign. Silver also advanced, while industrial metals traded mixed.

Crude oil prices softened, with Brent at $68.62 per barrel and WTI at $64.18. Murban crude jumped 4 percent to $75.41 on strong Indian demand. Natural gas gained 1.5 percent.

The dollar index slipped to 97.81 before recovering to 98.01 in early Friday trade. The rupee closed at 87.63 per dollar, up 5 paise.

Cryptocurrencies remained volatile, with Bitcoin at $112,500 and Ether above $4,500.

Market snapshot (August 29)

• Sensex 30: 80,080.57 (−0.87%)

• Nifty 50: 24,500.90 (−0.85%)

• Bank Nifty: 53,820.35 (−1.16%)

• Mid Cap 100: 56,047.50 (−1.27%)

• Small Cap 100: 17,294.35 (−1.45%)

• Dow Jones: 45,636.90 (+0.16%)

• S&P 500: 6,501.86 (+0.32%)

• Nasdaq: 21,705.16 (+0.53%)

• Dollar–Rupee: ₹87.63 (−₹0.05)

• Gold (per ounce): $3,418.70 (+$21.20)

• Gold (India, per sovereign): ₹75,240 (+₹120)

• Brent crude: $68.62 (+$0.57)