Tariff Fallout: Sensex, Nifty Face Volatility Amid Trump’s Trade Escalation

🧵 Sensex, Nifty Set to Drop for Third Session after Trump Raises Tariff to 50%

Key Update: Indian equity markets are likely to decline for a third straight day following U.S. President Trump’s executive order to double tariffs on Indian exports to 50%, heightening investor anxiety. President Trump’s move includes a 21‑day window for India to respond, offering a narrow negotiation opportunity

😟 Market Sentiment Falters

After a choppy trading session on August 6, bearish sentiment prevailed as the Reserve Bank of India’s monetary policy decision failed to lift benchmarks. Investors reduced exposure amid rising trade tension

Foreign Portfolio Investors (FPIs) were net sellers to the tune of ₹4,999 crore, while Domestic Institutional Investors (DIIs) bought ₹6,794 crore worth of equities, per provisional NSE data.

🔎 Market Technicals & Levels to Watch

♦ Nifty is consolidating in a tight range of 24,500–24,750, marked by small-bodied candles. A breakout—below 24,535–24,500 could drag it towards 24,300–24,250, while resistance lies at 24,760 (10‑DEMA). The 100‑day EMA near 24,595 currently offers support

♦ Nifty Bank remains weak. A bullish harami pattern has formed, but a credible reversal will only confirm if it closes above 55,700. Resistance zones lie around the 10‑DEMA (~55,900) and 20‑DEMA (~56,200). Support is at 55,100–55,000, with possible decline toward 54,500–54,300 on breakdown

📉 Volatility & Sentiment Indicators

♦ India VIX rose ~2.11% to 11.96, signaling cautious markets—volatility remains anchored near the 11 mark, implying consolidation rather than sharp sell-off

♦ Put‑Call Ratio (PCR) dropped from 0.72 to 0.60, highlighting stronger bearish sentiment and dominance of call sellers.

🧾 Trade & Economic Implications

♦ Trump’s order takes effect August 27, with exemptions for goods in transit arriving before September 17. The tariff increase targets India’s trade with Russia, particularly in oil imports, and threatens exports from textiles, pharmaceuticals, and auto components

♦ Indian textile exporters such as Gokaldas Exports, KPR Mill and others are expected to face sharp pressure, with some stocks sliding up to 6%

♦ Analysts warn the tariff escalation could clip India’s GDP growth by 80 basis points or more and may force New Delhi to adjust currency or fiscal policy to support affected sectors

🧭 What to Watch Next

♦ Approval from the 21‑day negotiation window: Can India reach an agreement or mitigate impacts?

♦ Market breakout levels: Watch Nifty for breakdown below 24,500 or recovery above 24,760 to define the next trend.

♦ Exporters & sectoral shocks: Monitor textiles, auto components, pharmaceuticals stocks for further fallout.

📝 Summary

Indian equity markets are grappling with fresh sell-off pressures as President Trump’s move to double tariffs on Indian goods to 50% rattles investor sentiment. Nifty and Sensex remain trapped in a narrow zone, with technical signals suggesting a bearish bias. Volatility is rising, and bearish indicators dominate. Export-reliant sectors are most at risk, while India seeks diplomatic and trade negotiations to avert economic disruption.